Audit Committee Composition and Corporate Risk Disclosure in Emerging Country

This study examines the effect of audit committee structure on the amount of risk information disclosed by banks in the emerging country. The sample of the study comprises eight banks listed on the Nigeria Stock Exchange. The data was collected from 72 annual reports for the year 2010–2018. The manual content analysis and regression methods were the analytical tools employed for the analysis of our panel data. The content analysis outcomes demonstrate that the frequency of operational risk disclosure is substantially greater than strategic and environmental risk disclosures. It is also discovered that good news, non-monetary, and backward-looking risk information are perceived to be less relevant to stakeholders’ decisions and nevertheless have considerably outweighed the most relevant information concerning bad news, monetary, and forward-looking risk information. Meanwhile, the number of independent directors in the audit committee, the presence of an independent chairperson in the audit committee, and the frequency of audit committee meetings have a significant positive effect on the quantity of risk information to disclose. However, the audit committee size and the existence of non-executive members in the audit committee are statistically insignificant; hence they do not influence the movement of risk information disclosure. The overall risk disclosure practice involving Nigerian banks is inadequate as the general statements and risk definitions and other irrelevant risk information are the most common practices adopted by banks. This disclosure behavior tends to promote agency costs between management and various corporate stakeholders.