THE RELEVANCE OF AUDIT COMMITTEE FUNCTIONS ON THE QUALITY OF FINANCIAL STATEMENT IN NIGERIA: USERS PERCEPTION
Abstract
This project analyzes the relevance of audit committee functions on the quality of financial statement in Nigeria, the users’ perception. The broad objective of the study is to ascertain if audit committee reports strengthen the decision relevance of corporate report and also to find out if the information content of audit committee reports relevant to its users. The primary source of data was used where questionnaires were distributed to gather information. The simple random sampling technique was used to select a sample size of 145 and the chi-square statistical tool was used to test the stated hypotheses. The findings revealed that that audit committee reports is very imperative to the users of corporate or published financials. It was concluded that the extent to which audit committee function has been achieved and is quite encouraging. The study recommends among others that audit committee of companies should meet regularly as the situation demands, as this impact positively on the shareholders investment.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In public companies, it is generally the shareholders who ultimately approve the auditor’s appointment, and the auditors are primarily responsible to and overseen by those representing the shareholders’ interests with regards to financial reporting and internal controls. Typically an audit committee (or its equivalent), acting as a largely independent body, will be charged with representing the shareholders’ interests. Companies may not necessarily have an audit committee and this interchange may be dealt with less formally but in an equivalent manner. The audit committee is a sub-committee of those charged with governance, and is typically made up of a majority of non-executive directors who are the shareholders’ representatives in relation to the external audit. They are usually responsible for overseeing the audit and evaluating the independence and performance of the auditors.
