BOARD INDEPENDENCE, AUDIT EFFECTIVENESS AND THE QUALITY OF REPORTED EARNINGS IN THE NIGERIAN CONSUMER GOODS FIRMS

Authors

  • Misbahu, Abubakar Muhammad Federal Polytechnic, Kaltungo
  • Isah Shittu Ph.D Ahmadu Bello University Zaria

DOI:

https://doi.org/10.57233/gujaf.v3i3.188

Keywords:

Earnings Quality, Earnings Persistence, Board Independence, Audit Effectiveness

Abstract

This paper studied the link of board independence, audit effectiveness and the quality of reported earnings in Nigeria. Using convenient sampling, 7 consumer-goods firms quoted in the Nigerian stock exchange (NSE) from 2016 to 2020 (5 years) were used in conducting the research. The data source was primarily obtained from firm’s annual report and analyzed by using Random Effect GLS in STATA 14. The findings show that board independence and expertise are statistically significant in affecting the quality of reported earnings. The result found board independence and audit expertise to be negatively affecting earnings quality in the Nigerian consumer goods firms. Considering the fact that the results found the characteristics of firms board – independence and expertise - to be significant in affecting earnings quality, the study recommended that the financial users should not over rely and have absolute confidence in using financial report. The monitoring mechanisms for shielding financial report may not be effective, and the final report can mislead the stakeholders in their various decisions. Thus, the regulatory bodies should focus more in revising it guides that will improve quality of earnings to restore stakeholder’s confidence in using financial reports.

Author Biographies

Misbahu, Abubakar Muhammad, Federal Polytechnic, Kaltungo

Department of Accounting,
Federal Polytechnic, Kaltungo

Isah Shittu Ph.D , Ahmadu Bello University Zaria

Department of Accounting,
ABU Business School,
Ahmadu Bello University Zaria

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Published

2022-10-30

How to Cite

Muhammad, M. A., & Shittu, I. (2022). BOARD INDEPENDENCE, AUDIT EFFECTIVENESS AND THE QUALITY OF REPORTED EARNINGS IN THE NIGERIAN CONSUMER GOODS FIRMS. Gusau Journal of Accounting and Finance, 3(3), 28. https://doi.org/10.57233/gujaf.v3i3.188