Audit Committee Characteristics and Timeliness of Financial Reports in Nigeria
Keywords:
Audit committee meetings; Timeliness; Audit report lag; Audit delay; Audit committee attributesAbstract
This study examines the nexus between audit committee characteristics and timeliness of financial reports in Nigeria. The study employed correlation research design using the annual report of thirteen (13) listed deposit money banks in Nigeria for the period 2016 - 2020. Timeliness of financial reports was measured as a categorical variable that assumed the value of one (1) for banks that released their annual report within the 90 days stipulated by the regulatory agency and zero (0) for those that fail to meet this requirement. Audit committee independence was measured using proportion of independent non-executive directors on audit committee; audit committee meeting was measured using number of meetings held in a year; audit committee financial expertise was measured using the proportion of members who have accounting or financial management knowledge while audit committee gender diversity was measured using the number of women on the board. The data for the study were analyzed using descriptive statistics, Pearson correlation and binary logit regression technique. The results show that audit committee meeting has a statistically significant relationship with timeliness of financial reports and the relationship was negative. Other audit committee attributes did not have any significant relationship with timeliness of financial reporting. Flowing from the findings, the study recommends that money deposit banks should ensure that meetings held by the audit committee are managed so that deliberations do not lead to untimely release of financial reports.
References
Abbott, L. J., Parker, S. & Peters, G. F. (2000). Internal audit assistance and external audit timeliness. Auditing: A Journal of Practice, Theory, 34 (4), 3–20.
Abernathy, J. L., Beyer, B. &Stefaniak, C. M. (2011).'Audit committee directors’financial expertise and audit report lag', in American Accounting AssociationAnnual Meeting, Denver, AUGUST 6-10, 2011, American Accounting Association.
Adams, R. B. & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94 (2), 291-309.
Aifuwa, H. O. &Saidu, M. (2020). Audit committee attributes and timeliness of corporate financial reporting in Nigeria. Accounting and Finance, 88 (2), 115-124.
Aldamen, H., Hollindale, J. &Ziegelmayer, J. L. (2018). Female audit committee members and their influence on audit fees. Accounting and Finance, 58 (1), 57-89.
Al-Muzaiqer, A. H., Ahmad, M. & Hamid, F. A. (2018). Timeliness of financial reporting and audit. Review of Accounting and Finance, 1 (1), 99-112.
Alkilani, S. Z., Hussin, W. N. W. & Salim, B. (2019). The influence of audit committee characteristics on modified audit opinion in Jordan. Journal of Finance and Accounting, 7 (3), 95-106.
Alzoubi, E. S. S. (2019). Audit committee, internal audit function and earnings management: evidence from Jordan. Meditari Accountancy Research, 5 (6), 23-34.
Alqatamin, R. M. (2018). Audit committee effectiveness and company performance: Evidence from Jordan. Accounting and Finance Research, 7(2), 48-57..
Al-Rassas, A. H. & Kamardin, H. (2016). Earnings quality and audit attributes in high concentrated ownership market. Corporate Governance, 16 (2), 377-399.
Armand, W. K., Handoko, B. L. & Felicia. (2020). Factors affecting audit delay in manufacturing companies. Journal of Applied Finance and Accounting, 7 (1), 35-44.
Apadore, K., & Noor, M. M. (2013). Determinants of audit report lag and corporate governance in Malaysia. International Journal of Business and Management, 8 (15), 151-163.
Bedard, J., Chtourou, S. M., Courteau, L. (2014). The effect of audit committee expertise, independence and activity on aggressive earnings management. Auditing: A Journal of Practice and Theory, 23 (2), 13–35.
Carter, D. A., Souza, F. D., Simkins, B.J., & Simpson, W.G. (2010). The gender and ethnic diversity of US boards and board committees and firm financial performance. Corporate Governance: An International Review, 18 (5), 396-414.
Chen, Y., Eshleman, J, D. & Soileau, J, S. (2016). Board gender diversity and internal control weaknesses. Advances in Accounting, Vol. 33 (6), 11-19.
Chukwu, G. T., & Nwabochi, N. (2019). Audit committee characteristics and timeliness of corporate financial reporting in the Nigerian insurance industry. International Journal of Managerial Studies and Research, 7 (4), 86-95.
Eze, P, G., & Nkak, P. E. (2020). Corporate governance and timeliness of audited reports of quoted companies in Nigeria. International Journal of Business and Management Invention, 9 (1), 38-46.
Firnanti, F.& Karmudiandri, A. (2020).Corporate governance and financial ratios effect on audit report lag. Accounting and Finance Review, 5(1) 15 – 21.
Gul, F.A., Hutchinson, M. & Lai, K. M. (2013). Gender-diverse boards and properties of analyst earnings forecasts. Accounting Horizons, 27 (3), 511-538.
Ika, S. R.& Ghazali, N. A. M. (2012). Audit committee effectiveness and timeliness of reporting: Indonesian evidence. Managerial Auditing Journal, 27 (4), 403-424
Ilaboya, J. O. & Lodikero, O. (2017). Board independence and financial statement fraud: A moderating effect of female gender diversity. Accounting and Taxation Review, 1 (1), 196-221.
Iyoha, F. O. (2012). Company attributes and the timeliness of financial reporting in Nigeria. Business Intelligence Journal, 5(1), 41-49.
Juwita, R., Sutrisno, T.& Hariadic, B. (2020). Influence of audit committee and internal audit on audit report lag: Size of public accounting firm as a moderating variable. International Journal of Research in Business and Social Science, 9(1), 137-142.
Mbobo, M. E. & Umoren, A. O. (2016). The influence of audit committee attributes on the quality of financial reporting. International Journal of Economics, Commerce and Management, 4 (7), 116-141.
Mohamad-Nor, M. N., Shafie, R. & Wan-Hussin, W. N. (2010). Corporate governance and audit report lag in malaysia', Asian Academy of Management Journal of Accounting and Finance, 6(2), 57-84.
Odjaremu, G. O., & Jeroh, E. (2019). Audit committee attributes and the reporting timeliness of listed Nigerian firms. Trends Economics and Management, 34 (2), 69–81.
Oraka, A. O., Okoye, J. A. & Ezejiofor, R, A. (2019). Determinants of financial reporting timeliness: An empirical study of Nigerian deposit money banks. International Journal of Advanced Academic Research, 5 (9), 18-35.
Ozoanigbo, C. V., Orjinta, I. O. & Ofor, T. N. (2016). Audit Committee Effectiveness and Timeliness of the Financial Reporting in Nigeria. International Journal of Research Development, 10(1), 1-13.
Pausa, S., Md Salleh, M. F. & Ahmad, A. (2014). Audit committee and timeliness of financial reporting: Malaysian Public Listed Companies. Middle-East Journal of Scientific Research, 22(2), 162-175.
Pradipta, A., & Zalukhu, A. G. (2020). Audit report lag: specialized auditor and corporate governance. GATR Global Journal of Business and Social Science Review, 8 (1) 41 – 48.
Putri, D. A., Azhar, J., & Erlina, K. (2017). Analysis of the factors that influence timeliness of financial statement submission in consumption industrial companies listed in Indonesian stock exchange (IDX). Retrieved form https://www.researchgate.net
Sharma, V. D., & Kuang, C. (2013). Voluntary audit committee characteristics, incentives, and aggressive earnings management: Evidence from New Zealand', International Journal of Auditing, n/a-n/a.
Soltana, N., Harjinder, S. & Vander, Z. (2015). Audit committee characteristics and audit report lag. International Journal of Auditing, 19 (2), 72-87.
Shatnawi, S., Hanefah, M., Adaa, A. & Eldaia, M. (2019). The Moderating Effect of Enterprise Risk Management on the Relationship between Audit Committee Characteristics and Corporate Performance: A Conceptual Case of Jordan. International Journal of Academic Research Business and Social Sciences, 9 (5), 16-28.
Tayo, G.Akinleye, O.& Olayeye, A. (2019). Effect of audit committee characteristics on the timeliness of financial reporting in Nigeria. Journal of Economics, Management and Trade, 24 (3), 1-10.
Turley, S.& Zaman, M. (2004). The corporate governance effects of audit committees. Journal of management and governance, 8(3), 305-332.
Wang, X. & Wu, M. (2011). The quality of financial reporting in China: An examination from an accounting restatement perspective. China Journal of Accounting Research, 4(4), 167-196.
Wahid, A. S. (2018). The effects and the mechanisms of board gender diversity: Evidence from Financial Manipulation. Journal of Business Ethics, https://doi.org/10.1007/s10551-018-3785
Yunos, R. M. (2017). The relevance of internal governance mechanisms to financial reports timeliness. Management and Accounting Review, 16 (1), 213-234.
Zaitul, N. & Ilona, D. (2019). Gender in audit committee and financial reporting timeliness: The case of unique continental European model. International Journal of Recent Technology and Engineering, 8 (2), 864-871.
Zandi, G. R. & Abdullah, N. A. (2019). Financial statements timeliness: The case of Malysian listed industrial product companies. Asian Academy of Management Journal, 24 (2), 127–141.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Henry Monye-Emina
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.
