BOARD ATTRIBUTES, AUDIT COMMITTEE COMPOSITION, AND FINANCIAL REPORTING QUALITY OF COMMERCIAL BANKS IN NIGERIA

Abstract

The aim of this study is to evaluate the relationship between the board of directors’ attributes, audit committee composition and financial statement quality of commercial banks in Nigeria. The data were collected for the study from the annual reports of twenty (20) commercial banks using contents analyses technique and covered a period of ten (10) years from 2010 to 2019. The Modified Jones quality of accruals model and the ordinary least square (OLS) technique of regression were used in analyzing the data for the study. The research findings showed that audit committee that comprises more independent members has significant positive effect on financial statement quality. In addition, the size of the board of directors also revealed a positive relationship with the financial statement quality. Consequently, the findings showed that board composition has a significant positive relationship with the financial statement quality. Therefore, the study concludes that the audit committee composition affects the of financial statement quality. Moreover, the effect of the composition of the board of directors and their numerical size does not have much effect on the financial statement quality of commercial banks. Therefore, there is a need to appraise and fortify the composition and task of the audit committee especially in monitoring and oversight function on the financial statements in order to enhance the financial statement quality. The composition and size of the board of directors in commercial banks in Nigeria should be reviewed and the board empowered to exercise a more active role in the financial statement process.