The Mediating Role of Accruals Earnings Management on the Effect of Audit Committee Attributes on Firm Performance

Evidence from Nigerian Listed Companies

Abstract

This paper examines how accruals earnings management mediates the link between audit committee attributes and firm performance of Nigerian registered companies. A sample of 64 companies registered on the Nigerian Stock Exchange with 704 firm-year observations over eleven years from 2011 to 2021 was used for the study. The research variables were examined by descriptive, correlation, and regression analysis. The findings reveal that audit committee characteristics have a substantial and favourable impact on firm performance. However, the research results show a significant inverse correlation between audit committee attributes and accruals earnings management. Furthermore, these data have shown that accruals earnings management mediates the link between audit committee characteristics and firm performance. These findings have practical implications such as the need for the Nigerian Securities and Exchange Commission to strengthen audit committees of listed Nigerian companies. This has the potential to boost firm performance by enhancing corporate governance and the quality of financial reports. The results of the study will be useful to investors, regulators, and other interested parties.