Impact of corporate board and external audit attributes on earnings quality: Experience from Nigeria quoted foods and beverages firms
1 Department of Management and Accounting, Faculty of Management Sciences, Ladoke Akintola University of Technology Ogbomoso.
2 Department of Accounting, Faculty of Management Sciences Osun State University, Oyo State, Nigeria.
3 Department of Accounting, Faculty of Management Sciences Ladoke Akintola University of Technology Ogbomoso, Open and Distance Learning Centre. Oyo State, Nigeria.
Research Article
World Journal of Advanced Research and Reviews, 2021, 12(03), 612–623
Publication history:
Received on 21 November 2021; revised on 28 December 2021; accepted on 30 December 2021
Abstract:
The recent audit failures has pointed to weaknesses in financial report and give occasion of doubt to users about the reliability of earnings declared by firms. This study examines the effects of corporate board and external audit attributes on earnings quality of listed foods and beverages firms in Nigeria. Secondary data were employed through audited annual reports and accounts of eight (8) selected foods and beverages firms listed on the Nigerian Stock Exchange using judgmental sampling technique. Data collected were analyse using descriptive statistics like table, percentage and inferential statistics such as panel regression analysis. All Analysis were tested at 5% level of significance. The results revealed that audit firm size (β=14485.32, P=0.000) which is external audit attribute and board size (β=-2741.887, P=0.000), audit committee presence (β= -8225.11, P=0.044) and company size (β= 5454.20, P=0.000) were the significant determinants of external audit and corporate board attributes of listed foods and beverages firms in Nigeria. Also, the result of panel regression revealed that audit independence (β= -6.57e-06, P=0.035) and audit firm size (β=0.1141479, P= 0.018) were the external audit attributes that had significant effect on discretionary accruals. The study therefore concluded that corporate board attributes (audit committee) and external audit attributes (auditor independence, audit firm size) had significant effect on earnings quality as measured by earnings management of selected foods and beverages firms in Nigeria. The study recommends that in order to enhance auditor’s independence, uniform audit fee should be formulated, and also, disclosure should be made on other corporate board attributes like board members’ year of experience and gender and for effective monitoring system.
Keywords:
Earnings Management; Food and Beverages Firm; Audit Quality Attributes; Earning Quality; Discretionary Accruals
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