Title: Audit committee reports and corporate governance in Nigeria

Authors: Akintola Owolabi, Chris Ogbechie

Addresses: Lagos Business School, Pan-African University, 2 Ahmed Onibudo St., Victoria Island, Lagos, Nigeria. ' Lagos Business School, Pan-African University, 2 Ahmed Onibudo St., Victoria Island, Lagos, Nigeria

Abstract: Audit committees are said to be important mechanisms of corporate governance. The aim of this research is to assess the quality of audit committee reports in annual reports and accounts by specifically measuring their conformance with the provisions of the Nigerian Companies and Allied Matters Act 1990. Of the 260 reports selected five years post Enron (2002-2006) for analysis, only 134 (52%) were available. The empirical results indicate that the reports (mostly unqualified) do not support public opinion and an earlier study on the credibility of financial report in Nigeria [see for example, Reports on the Observance of Standards and Codes (ROSC) (2004) by the World Bank and the International Monetary Fund (IMF)]. It is also at variance with the allegations of financial statement fraud committed by high profile companies in Nigeria (e.g., Unilever and Cadbury). An improvement in the quality of audit committee reports should enhance the credibility and transparency of financial report.

Keywords: auditing; audit committees; corporate governance; financial reporting; Nigeria; fraud; audit quality.

DOI: 10.1504/IJCA.2010.030338

International Journal of Critical Accounting, 2010 Vol.2 No.1, pp.64 - 78

Published online: 14 Dec 2009 *

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