European Journal of Accounting, Finance and Investment

Audit Committee Independence, Financial Expertise, Share Ownership And Financial Reporting Quality In Nigeria: Evidence From Listed Non-Financial Firms, 2010-2025

Rita Chidinma Okonkwo

Department of Management, Central university of Nicaragua.

Stephen Yero Wetsi

Department of Management, Central university of Nicaragua.

Keywords: audit committee, audit committee independence, financial expertise, share ownership, financial reporting quality, corporate governance

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Abstract

The study looked at how the quality of financial reporting of listed non-financial companies in Nigeria from 2010 to 2025 is influenced by audit committee independence, financial expertise, and shareholding. The ongoing concern motivated the study because formal compliance with audit committee requirements does not mean that there will be any real monitoring of financial reporting judgments, accrual estimates, internal control deficiencies, and auditors' disagreements with management. The study is rooted in agency theory, backed by resource-dependence and restone-alignment hypotheses. The empirical data were obtained from published annual reports, financial statements, corporate governance statements, and the public market. Quality was measured by McNichols' measure of accrual quality, while the explanatory variables were measured by different audit committee disclosures. The results of the empirical test show that audit committee share ownership has an encouraging and statistically significant effect on audit quality, whereas financial expertise has a positive but weakly significant effect. The result shows that nominally independent audit committees that do not have competency, vigilance, audit engagement, and enforcement may not properly execute their charter. The performance of the audit committee is concluded to be a function of both substantive independence and financial and nonfinancial abilities over transparent ownership incentives and active regulatory enforcement.

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