AUDIT COMMITTEE ATTRIBUTES AND EARNINGS MANAGEMENT IN NIGERIAN LISTED SERVICE FIRMS

Abstract

The role of audit committees in curbing earnings management remains a contentious issue in corporate governance literature, with prior studies reporting mixed and inconclusive findings. This paper examines the relationship between audit committee characteristics and earnings management within listed service firms in Nigeria, with particular emphasis on committee size, independence, financial expertise, and meeting frequency. Drawing on agency theory and corporate governance frameworks, the study highlights how specific audit committee attributes influence managerial discretion in financial reporting. Using firm-level data spanning 2019–2023, earnings management is proxied through discretionary accruals, while audit committee attributes serve as key explanatory factors. The findings indicate that audit committee size and financial expertise play a constraining role on earnings management, whereas committee independence and meeting frequency are associated with higher earnings management practices. These results underscore the complexity of audit committee effectiveness and suggest that mere compliance with governance codes may not be sufficient to ensure financial reporting quality. The study contributes to ongoing debates on audit committee functionality in emerging markets and provides insights relevant to regulators, policymakers, and corporate stakeholders seeking to strengthen corporate governance mechanisms in Nigeria.