Audit Committee Effectiveness on Firm’s Financial Distress of Listed Industrial Goods Firms in Nigeria

Yakubu Umar, Murtala Abdullahi, Alamin Mohammed Ibrahim

Abstract


The study aims to examine the audit committee effectiveness on firm’s financial distress of listed industrial goods firms in Nigeria. The sample size used is fourteen (14) firms listed in the Nigerian Stock Exchange (NSE) for the period 2011-2016. The collected data were analyzed using General Least Square regression method. The results empirically reveal that, audit committee independence (ACID), Audit committee meetings (ACMT) and Audit committee meeting attendance (ACMAT) are negatively and significantly related to the firm’s financial distress of the firms under investigations. On the basis of the empirical result, the paper  recommended that shareholders, stakeholders and other relevant policy makers of industrial goods firms should improve the activities of audit committee by adding more independence non-executive members which allow them to discharge their duties in accordance with the provision of the law, increase the number of meetings per annum and ensures the full attendance character of the committee members in the meeting, because it will help in making collective and effective decision on the factors that can undermine the firms’ financial performance.


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