Audit Committee Characteristics and Financial Reporting Quality of Non-Financial Firms in Nigeria

• Post by: birpo
• March 5, 2026
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Orji, Lilian Uzoamaka ¹ & Prof. Inyiama Oliver Ikechukwu ²

Abstract         

This study investigates the relationship between audit committee characteristics and financial reporting quality of oil and gas firms in Nigeria. Specifically, it examines the effects of audit committee size, number of meetings and gender diversity on auditor size, used as a proxy for financial reporting quality. An ex-post facto research design was adopted, covering a ten-year period from 2015 to 2024. Secondary data were collected from the annual reports and accounts of five purposively selected oil and gas firms listed on the Nigeria Exchange Group (NGX). Descriptive statistics and Pearson correlation analysis were employed to test the hypotheses. The results indicate that audit committee size exhibits a weak negative relationship with auditor size (r = -0.1846; 18%), suggesting limited influence on financial reporting quality. The number of audit committee meetings shows a weak positive relationship with auditor size (r = 0.3858; 39%), indicating minimal impact on auditor selection. In contrast, audit committee gender diversity demonstrates a moderately strong and positive relationship with auditor size (r = 0.5392; 54%), highlighting its meaningful contribution to enhancing financial reporting quality. The findings suggest that among the audit committee attributes studied, gender diversity significantly influences the choice of high-quality auditors in Nigeria’s oil and gas sector. The study recommends that firms optimize audit committee composition by maintaining the statutory five-member size, ensuring regular and purposeful meetings, and promoting gender diversity, with at least 40% female representation, to strengthen oversight, governance, and reliability of financial reporting. These insights contribute to the understanding of governance mechanisms that enhance audit quality and inform policy and managerial practices within Nigeria’s non-financial sector.

Keywords: Audit Committee, Audit Committee Size, Audit Committee Gender Diversity, Number of Audit Committee Meetings, Auditor Size, Financial Reporting Quality, Oil and Gas Sector, Nigeria