AUDIT COMMITTEE CHARACTERISTICS ON EARNINGS MANAGEMENT OF LISTED INDUSTRIAL GOODS COMPANIES IN NIGERIA

Abstract

This study examines the impact of audit committee characteristics on earnings management
of listed industrial goods companies in Nigeria from 2012 to 2021.The number of industrial
goods firms is fifteen (15), out of which nine (9) were used for analysis. The study seeks to
examine the effect audit committee characteristics (as measured by audit committee financial
expertise, audit committee meetings) have on earnings management of listed industrial goods
companies in Nigeria. The method of data collection for the study was secondary and data
were extracted from sources, such as the sampled firms annual reports and accounts. The
study uses STATA 13.0 as a tool for the data analysis. The results show that there is positive
significant relationship between audit committee financial expertise, audit committee
meetings and audit committee size on earnings management of listed industrial goods
companies in Nigeria. The research concludes that there is a positive and significant
relationship between audit committee financial expertise and earnings management of listed
industrial goods companies in Nigeria. Audit committee meeting and earnings management
of listed industrial products corporations in Nigeria have a positive and significant
association. Finally, there is a positive and significant association between the firm size and
the earnings management of listed industrial goods companies in Nigeria. Leverage has a
positive association with earnings management. The study recommends that listed industrial
goods companies in Nigeria should engage experts audit members who have specific
knowledge and expertise and also the corporations should hold regular meetings to oversee
financial reporting process and internal control of listed industrial goods companies in
Nigeria. Also, the management of listed industrial goods companies in Nigeria should
enhance the size of their firms since it has the ability to increase the earnings of listed
industrial goods firms in Nigeria. The firm should monitor its leverage since it can improve
financial performance.