AUDIT COMMITTEE INDEPENDENCE AND FINANCIAL REPORTING QUALITY OF LISTED MANUFACTURING FIRMS IN NIGERIA: MODERATED BY GENDER DIVERSITY

Abstract

Given Nigeria’s continuous financial reporting issues, notably the Oando Plc incident and longstanding security and exchange commission-reported fraud cases, questions remain over the veracity of business disclosures in the manufacturing sector. This study examines the effect of audit committee independence on financial reporting quality of listed manufacturing firms in Nigeria and moderated by audit committee gender diversity. The population of the study consisted of 46 listed firms drawn from the agriculture, consumer products, healthcare, and industrial goods sectors for the period 2010 to 2023. A purposive sampling technique was adopted to select firms that met predefined criteria, including continuous listing status and availability of complete annual reports throughout the study period. Based on these criteria, a final sample of 35 firms was retained for analysis. The study adopted an ex-post facto research design, consistent with its reliance on historical secondary data. Data were analysed using Generalized Least Squares (GLS) panel regression, which was employed as the estimation technique to obtain efficient and unbiased coefficients in the presence of heteroskedasticity and other panel-specific disturbances. Findings reveal that audit committee independence has a positive but statistically insignificant effect on financial reporting quality while gender diversity exhibits a negative and statistically significant impact. Additionally, the interaction between independence and gender diversity is positive but statistically insignificant. Therefore, the study recommends that regulatory authorities and firm management strengthen governance structures that enhance the quality and consistency of financial disclosures across listed firms. This study suggests that Nigerian corporate governance policy should strengthen the functional involvement of independent and female audit committee members so that their roles translate into better oversight and more credible financial reporting.

Keywords: audit committee independence, gender diversity, financial reporting quality, listed manufacturing firms