Independence

Board Committees’ Independence and Financial Performance of Listed Non-Finance Firms in Nigeria (Published)

This study examined the relationship between board committees’ independence and financial performance of listed non-finance firms in Nigeria. The specific objectives were to determine the relationship between audit committee’s independence and financial performance of listed non-finance firms in Nigeria; evaluate the relationship between risk management committee’s independence and financial performance of listed non-finance firms in Nigeria; ascertain the relationship between remuneration committee’s independence and financial performance of listed non-finance firms in Nigeria. Ex-post facto research design was adopted and the population of the study consists of all the listed non-finance firms. As of December, 2021, we had 108 non-finance firms listed on the floor of the Nigerian Exchange Group. The final sample size consists of 10 non-finance firms that were arrived at based on the availability of data for ten years for all the research variables. Findings revealed that audit committee independence significantly influence the performance of non-finance companies in Nigeria; Risk committee independence significantly influence the performance of non-finance companies in Nigeria and remuneration committee independence negatively influence the performance of non-finance companies in Nigeria. Specifically, the study concluded that only the variable of remuneration committee independence has negative but insignificant effect on firm financial performance. Furthermore, the study concluded that and increase in audit committee independence and risk management committee independence significantly increase the financial performance of listed non-finance firms in Nigeria. Based on the findings of this study, the researcher recommended that corporate boards of non-finance firms should maintain a sizeable audit committee that are dominated by non-executive directors and shareholders so as to maintain their independence as this significantly influence the firm financial performance.

Keywords: Independence, board committees, financial performance and non-finance firms

Determinant of Audit Quality in Post IFRS and 2018 Code of Corporate Governance: Evidence from Nigeria (Published)

Audit quality is an issue of great concern in dealing with the confidence and credibility crisis that has engulfed the investment scene following collapse of many firms around the world as a result of outright fraud or fraudulent financial reporting. The study used panel data approach to investigate determinant of audit quality of firms listed in Nigerian Stock Exchange. Positivist research paradigm and Ex post facto research design was adopted. Thus secondary data was collected from sample of 14 firms purposively selected from non-financial firms from 2012 to 2019 resulting to 112 firm specific observations. Audit quality measured by accrual quality developed by Dechow and Dichev 2002 is the dependent variable.  Audit fee, audit independence, audit switching, audit effectiveness (audit firm size) constitute the independent variables. Result of the study revealed that about eleven percent variation in the audit quality of sampled firms was jointly explained by the independent variables used in the study. The beta coefficient of the variables showed that audit fee, audit independence, audit switching and audit effectiveness (audit firm size) is negative but not significant in influencing accrual level. This indicates that the independent variables by reducing accrual level increases audit quality. The study concluded that audit fee, audit independence, audit switching and audit effectiveness by reducing accrual level has positive but insignificant effect on audit quality of selected firms. The study affirms Agency theory that managers opportunistic behaviour can be reduced by a third party employed by the owners. The study among other things recommended that firms should review their policies particularly as it concerns their external auditors to ensure that there are no familiarity threats, real or perceived conflict of interest that will undermine their independence in carry out their services. there is also need to enforce recent regulations toward audit firm rotation or switching after the ten years’ period specified in the 2018 Code of corporate governance in order to reduce information risk and enhance audit quality.

Keywords: Audit fee, Capital market, Determinant, IFRS, Independence, audit effectiveness, audit switching

The Effect of Internal Audit Characteristics on the Effectiveness of Internal Auditors (Published)

The purpose of this research is to investigate the effects of internal audit independence and objectivity on internal audit effectiveness in the Malaysian context. A quantitative method was applied based on a questionnaire which has been distributed to the internal auditors who are members of the Institute of Internal Auditors Malaysia (IIAM). A valid 119 responses have been collected. A Structural Equation Modeling technique (SEM) was employed using SmartPLS 3 to analyze and interpret the data. The findings revealed that internal audit independence was positively affecting internal audit effectiveness. However, the effect of internal audit objectivity does not appear in the relationship with internal audit effectiveness. This study provides useful information to both academics and practitioners of internal auditing in highlighting the importance and the effect of internal audit characteristics in improving the effectiveness of internal auditors.

Keywords: Independence, Internal Audit Effectiveness, Internal Auditing, Objectivity

Do Drivers of Corporate Governance Influence shareholder Value (Published)

This study examines effect of drivers of corporate governance on shareholder value. Data from annual financial reports of listed manufacturing companies in Nigeria were analysed and tested using panel dynamic ordinary least square model and panel unit root tests. Most variables used as proxies for shareholder value responded positively to variations in audit independence while there is a non-significant effect of audit independence on all variables used as proxies for shareholder value. Board independence has a positive and non-significant effect on shareholder value whereas board size and audit size negatively and non-significantly affect shareholder value.  The study further reveals that audit size, board size and board independence have negative and non-significant impact on the economic value added which represents the market value of shareholder assets. Only audit independence has a positive and non-significant impact on economic value added. Corporate governance drivers are efficacious but do not influence shareholder value significantly.   

 

Keywords: Audit Committee, Board size, Corporate Governance, Environment, Independence, Shareholder value