- THE INDEPENDENCE OF AUDITORS AND RELIABILITY OF FINANCIAL REPORTS IN THE NIGERIA BANKING SECTOR
- AN ASSESSMENT OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANISATIONAL PERFORMANCE IN THE BANKING INDUSTRY (A STUDY OF FIRST BANK NIGERIA PLC.)
- THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANISATIONAL PERFORMANCE (MTN NIGERIA COMMUNICATION LIMITED IN LAGOS)
- DIVIDEND POLICY AS STRATEGIC TOOL OF FINANCING IN CORPORATE ORGANIZATIONS (A CASE STUDY OF FIRST BANK PLC AND ECO BANK NIGERIA PLC)
- THE IMPACT OF CORPORATE GOVERNANCE MECHANISM ON FIRM PERFORMANCE IN NIGERIA (A STUDY OF CADBURY NIGERIA PLC)
- THE ROLE ACCOUNTING RECORDS ON THE PERFORMANCE OF SMALL SCALE INDUSTRIES IN NIGERIA [A CASE STUDY OF SELECTED LOCAL GOVERNMENT AREAS IN LAGOS STATE]
- THE EFFECT OF SPORTS PROGRAMME SPONSORSHIP ON THE CORPORATE IMAGE OF SELECTED ORGANIZATIONS IN LAGOS STATE
- IMPACT OF SPORTS PROGRAMME SPONSORSHIP ON THE CORPORATE IMAGE OF SELECTED ORGANIZATIONS IN LAGOS STATE
- NEWSPAPER COVERAGE OF NIGERIA 2015 GENERAL ELECTION (A CASE OF SELECTED NEWSPAPER IN NIGERIA)
- EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANIZATIONAL PERFORMANCE (A CASE STUDY OF NESTLE NIGERIA PLC)
AUDIT COMMITTEE INDEPENDENCE AND CORPORATE GOVERNANCE IN NIGERIA (A CASE STUDY OF SELECTED LISTED COMPANIES)
Determinant of audit committee’s independence in corporate governance has been an issue on the front burner of public discuss. This premised on the fact that the audit committee to some is of no importance while to others certain things should be effective and independence so as to build the confidence of investors in taking investment decisions. Different writers have viewed the committee’s from different perspective but however, this research work is centered on those factors that will determine the committee’s independence on this basis, issues like external auditors, auditor committee, audit committee independence, proposed rules by SEC qualification of audit committee members, composition of audit committee, size of audit committee, audit committee meeting etc were reviewed. The primary source of data collection was used in this study where chi-square statistical tool was used to test the stated hypotheses. The study recommended among others that audit committee member should have knowledge of financial accounting, auditing and corporate finance.
TABLE OF CONTENTS
Title Page i
Chapter One: Introduction 1
1.1 Background to the Study 1
1.2 Statement of Problem 2
1.3 Research Questions 3
1.4 Objective of the Study 3
1.5 Statement of Hypotheses 4
1.6 Significance of the Study 4
1.7 Scope of the Study 5
1.8 Limitation of the Study 5
Chapter Two: Review of Related Literature 6
2.1 Introduction 6
2.2 Audit Committee 6
2.3 What is independence 14
2.4 Phases of independence 16
2.5 Adult committee independence 20
2.6 Composition of Adult Committee 32
2.7 Adult Committee and External Auditor 34
2.8 Adult Communication with Adult Committee 36
2.9 Adult committee Relationship with Management 38
2.10 Effective and Ineffective Adult Committee 39
2.11 Corporate Governance and Adult Committee 41
2.12 Factors Influencing Corporate Governance 45
2.13 Role of Corporate Governance in monitoring Auditors Independence 49
Chapter Three: Research Method and Design 53
3.1 Introduction 53
3.2 Research Design 53
3.3 Description of Population of the Study 53
3.4 Sample Size 54
3.5 Sampling Techniques 54
3.6 Sources of Data Collection 54
3.7 Method of Data Presentation 55
3.8 Method of Data Analysis 58
Chapter Four: Data Presentation, Analysis and Interpretation
4.1 Introduction 57
4.2 Presentation of Data 57
4.3 Data Analysis 57
4.4 Hypothesis Testing 63
Chapter Five: Summary of Findings, Conclusion and Recommendations 67
5.1 Introduction 67
5.2 Summary of Findings 67
5.3 Conclusion 68
5.4 Recommendations 68
1.1 Background to the Study
The governance structure of an entity can play an important role in monitoring and safeguarding the independence of its external auditor. The exact form of an entity governance structure and the role any government body perform in relation to the external auditor may vary depending on the requirements of national laws. In some jurisdictions, a single body commonly known as a “audit committee” oversee all matters relating to the external auditors.
Stricter standards of accountability cannot be achieved without an effective internal control structure. One way that public officials can enhance accountability and demonstrate proper stewardship over public funds is to establish and support on adequate control environment within their organizations. A critical element of the control environment is an independent of management on matters of financial reporting and internal control.
An effective audit committee can provide several important aspect of control including ensuring the independence of the internal auditing function and ensuring appropriate action is taken on audit findings.
The audit committee serves in a unique capacity as an important communication link between external and internal auditors and operating management and means of reducing the risk management override of key elements of the organization internal control structure.
Hence an attempt to find out what will determine the audit committee independence in corporate government is what this research work seeks to address.
1.2 Statement of Problem
One of the foremost functions of the audit committee is to review the financial data of the company on continuous basis and strengthen internal accounting controls, in order to enhance reliability and integrity of financial reporting.
The spate of audit failure in the world, especially in Nigeria, has brought great disappointments to the users of financial reports. The cause of the problem has been linked to lack of effective oversight of audit committee which has also been linked with creative accounting. In Nigeria, the challenge of audit committee and audit quality reporting have not attracted much empirical studies beyond mere unreliable opinions.
Given the above scenario, the major problem for this study is to determine whether audit quality can significantly be influenced by audit committee characteristics of Nigerian Listed firms. The study attempts to ascertain and establish whether there are significant relationships between audit committee independence and corporate governance in Nigerian Listed firms.
1.3 Research Questions
The research questions of this study are as follows:
i. To what extent does the composition of audit committee affect decision making?
ii. To what extent does independence influence audit quality?
iii. To what extent do audit committee members’ qualifications influence decision making?
1.4 Objectives of the Study
The following are the objectives of the study;
i. To find out if the composition of audit committee affect decision making.
ii. To ascertain if independence influence audit quality.
iii. To determine if audit committee members’ qualification influence decision making.
1.5 Statement of Hypotheses
This study will rest the hypothesis below.
The composition of audit has no significance effect on decision making.
Independence does not influence audit quality.
There is no significant relationship between audit committee members qualifications and decision making.
1.6 Significance of the Study
Since the inception of audit committee public companies as stated in CAMA section 359 (3) many have underscored the roles and responsibilities of the committee. Hence, in attempt to revive the committee this research work will assist companies to know how they can revive the committee redirect individual minds and assist future researchers to know areas when they should research.
The specific significance includes:
a. It will ensure free and fair play, in terms of investment by investors.
b. It will enable corporate owners to know how exactly to motivate the committee members for effective accountability and transparency in corporate reporting.
c. It will encourage government to insist that audit committee should be setup even by private companies.
1.7 Scope of the Study
The scope which is otherwise referred to as delimitation of the study shall cover the Nigeria Stock Exchange Benin City. Emphasis is placed on the following areas: significance of the determinant of audit committee independence. A time frame of five years (2011 to 2015) was adopted in this study using a sample size of 120 was used for effective result.
1.8 Limitations of the Study
The major limitation of the study as it was with several studies in developing economies was data accessibility and accuracy. Also, there was the challenge of inappropriate measurement of variables. Another challenge faced in the course of this field work was time factor and inadequate funds.