Audit Committee Characteristics and Financial Reporting Quality: A Study of Listed Nigerian Agricultural Firms

Abstract

This study investigated the impact of audit committee characteristics on the financial reporting quality of listed agricultural firms in Nigeria. Audit committee characteristics were disintegrated into audit committee size, audit committee independence, and audit committee frequency of meetings while financial reporting quality was captured using discretionary accruals. The study adopted ex post facto research design. The study employed secondary data collected from financial statements of listed agricultural firms from 2012 to 2023. The data were analyzed using panel least squares regression technique, and correlation analysis employed to derive meaningful insights. Findings from the study revealed that audit committee size has a positive and statistically significant impact on discretionary accruals with a coefficient of 1.270 and a pvalue of 0.017. Audit committee independence was found to have a positive but insignificant relationship with discretionary accruals, with a coefficient of 1.000 and a p-value of 0.302. Similarly, audit committee frequency of meetings exhibited a positive and statistically significant impact on discretionary accruals, with a coefficient of 3.480 and a p-value of 0.006. In relation to the control variable, firm leverage has a negative and significant impact on discretionary accruals with a coefficient of -7.800 and a p-value of 0.003. Based on these findings, it was recommended that the board should ensure that audit committee members possess relevant expertise and knowledge to effectively oversee financial reporting processes, regardless of their size, independence status, and frequency of meetings held.