Reliability of the audit committee in weak institutional environments: Evidence from Nigeria

Ashiru, Folajimi; Adegbite, Emmanuel; Frecknall-Hughes, Jane; Daodu, Olabisi

Abstract

Relying on institutional theory, this article presents external stakeholders’ perspectives on the factors that influence audit committees’ independence and reliability in a weak institutional context. We conducted 37 semi-structured interviews with two critical external stakeholder groups (27 experienced professional investors and 10 senior regulatory officials) in the Nigerian banking sector. Our study finds that the independence of audit committee members, being an ‘a posteriori’ rather than an ‘a priori’ accountability verification, bears institutional contextual bias. Consequently, we unpack five factors (allegiance to the dominant owner; poor professional conduct; corruption; nepotism and opportunism; and impunity) that influence external stakeholders’ perception of the reliability of the audit committee’s independence in Nigeria.

Citation

Ashiru, F., Adegbite, E., Frecknall-Hughes, J., & Daodu, O. (2024). Reliability of the audit committee in weak institutional environments: Evidence from Nigeria. Journal of International Accounting, Auditing and Taxation, 57, Article 100657. https://doi.org/10.1016/j.intaccaudtax.2024.100657

• Journal Article Type: Article
• Acceptance Date: Feb 26, 2024
• Online Publication Date: Nov 4, 2024
• Publication Date: 2024-12
• Deposit Date: Mar 5, 2024
• Publicly Available Date: Nov 5, 2026
• Journal: Journal of International Accounting, Auditing and Taxation
• Print ISSN: 1061-9518
• Electronic ISSN: 1879-1603
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 57
• Article Number: 100657
• DOI: https://doi.org/10.1016/j.intaccaudtax.2024.100657
• Keywords: Audit committee, independence, accountability, external stakeholders, Nigeria
• Public URL: https://nottingham-repository.worktribe.com/output/32168018
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S1061951824000636?via%3Dihub