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Assessing Audit Committee Effectiveness on Real Earnings Management of Listed Non-Financial Firms in Nigeria

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Abstract

The study is aimed at investigating the potential impact of audit commi􀄴ee in the financial performance of listed non-financial firms in Nigeria for a period of 10years spanning 2011- 202. The dependent variable of the study is real earnings management proxy Srivastava (2019) revised model while the independent variable of the study is audit commi􀄴ee proxy by audit commi􀄴ee independence, audit commi􀄴ee size, audit commi􀄴ee diversity and audit commi􀄴ee meetings. The study arrived at 760 firm year observations from a population of 113 listed non-financial companies in Nigeria; the extracted secondary data was analysed using PCSE and the results revealed that audit commi􀄴ee independence audit commi􀄴ee size and audit commi􀄴ee meetings have no significant impact on real earnings management while only audit commi􀄴ee diversity among all the variables showed a significant positive impact on real earnings management of listed non-financial firms in Nigeria. The study recommends that the number of members in the audit commi􀄴ee should be increased by the relevant authority and the percentage of women in the composition in the audit commi􀄴ee should also be increased as this will help in reducing earnings management and improve the efficiency of the commi􀄴ee.

Suggested Citation

  • Muhammad Ahmad, Ahmad & Sunday, Inyada, 2023. "Assessing Audit Committee Effectiveness on Real Earnings Management of Listed Non-Financial Firms in Nigeria," Multidisciplinary Journal of Social Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 3(1), pages 181-196, June.
    • Handle: RePEc:ris:amjoss:0009
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    References listed on IDEAS

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    1. Naila Tabassum & Ahmad Kaleem & Mian Sajid Nazir, 2014. "Earnings management through overproduction and subsequent performance: an empirical study in Pakistan," International Journal of Indian Culture and Business Management, Inderscience Enterprises Ltd, vol. 9(3), pages 267-282.
    2. Roychowdhury, Sugata, 2006. "Earnings management through real activities manipulation," Journal of Accounting and Economics, Elsevier, vol. 42(3), pages 335-370, December.
    3. Anup Srivastava, 2019. "Improving the measures of real earnings management," Review of Accounting Studies, Springer, vol. 24(4), pages 1277-1316, December.
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