Evaluating the Effects of Financial Fraud and Board Governance on Going Concern Performance of Africa Non-Industrial Firms

Studies have been conducted on the interplay between financial fraud and the performance of firms, most especially as it relates to the threats to the going concern. The concern shown by these scholars has elicited the focus of this study in examining how the nexus between these variables impacts Africa firms. This study evaluated the effects of financial fraud and board governance on the going concern performance of African non-industrial firms. Using an ex post facto research design, secondary data from 439 listed non-industrial firms in the MachameRatios DataPC between 2012 and 2023 were analysed using longitudinal panel regression in STATA. Results reveal a statistically significant and inverse relationship between financial fraud and going concern performance, indicating that increases in fraudulent activity are associated with declines in financial sustainability. Furthermore, board governance measured by audit committee independence and board gender diversity was found to significantly moderate this relationship, mitigating the negative impact of fraud on performance. These findings underscore the critical role of governance in sustaining firms in weak institutional environments. The study recommends that firms enhance audit committee oversight, enforce gender-diverse board structures, and implement proactive fraud detection mechanisms. However, the study is limited by its focus on listed firms and reliance on quantitative data, which may not capture behavioural and cultural dimensions of fraud. Future studies are encouraged to adopt mixed-method approaches and broaden the scope to include private and public sector entities across African economies.