The Moderating Effect of Audit Committee Composition on the Relationship Between Auditor Independence and Audit Quality
Year: 2021
Type: article
Abstract: The purpose of this study is to empirically examine the moderating effect of audit committee composition on the relationship between auditor independence and audit quality of Deposit Money Banks (DMBs) in Nigeria. The population of the study consists of all the sixteen – 16 –DMBs listed in Nigerian Stock Exchange, covers a 10-years period from 2009 to 2018, and fourteen were sampled after the application of filter; triangulation research design was used. A non-survey method was used to obtain information on the annual reports and accounts of the DMBs. While the last research question was answered by using survey questionnaire, that is, what is the people’s perception on audit committee composition? Multiple regressions analysis was utilized to achieve the research objectives. Descriptive statistics, correlation analysis and regression analysis were techniques used for data analysis through Stata 14 software version. The study finds that Audit tenure and Audit firm rotation have negative and insignificant effect on audit quality of listed DMBs in Nigeria; Audit fees has a negative and insignificant effect on audit quality of DMBs in Nigeria; while moderated audit fees has negative and significant effect on the audit quality of DMBs in Nigeria; Audit committee composition has negative and insignificant relationship with audit quality of listed DMBs in Nigeria; also the moderated variable, audit committee composition moderated the relationship between auditor independence and audit quality of listed DMBs in Nigeria. Therefore, became significant and better in explaining audit quality; finally, the finding from the questionnaire, is consistent with corporate governance literature which suggests that financial expertise is a very important factor in audit committee. Thus, the study recommends amongst others that more attention should be given by regulators to the definition of financial expertise of directors in audit committee and require at least a minimum of two members need to be financially literate as against the minimum of one member been required to be financially expertise in the committee and, this should be backed up by law and enforced.
Institutions: Bayero University Kano, Gombe State University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4412416639