AUDIT COMMITTEE AND FINANCIAL RISK DISCLOSURE

In the wake of recurrent financial crises and heightened stakeholder demand for transparency, financial risk disclosure (FRD) has emerged as a critical mechanism for mitigating information asymmetry and enhancing market confidence. However, the role of the audit committee (AC) in shaping the quality and extent of FRD remains underexplored, particularly in emerging economies. This study investigates the effect of audit committee characteristics—size, independence, financial expertise, and meeting frequency—on the level of financial risk disclosure among 127 publicly listed firms on the Main Board of NGX. The study is motivated by the problem of persistent opacity in financial risk reporting, which undermines informed decision-making and poses significant threats to corporate accountability and investor protection. The purpose of the study is to assess whether and how the composition and effectiveness of the audit committee influence firms' financial risk transparency. A quantitative research design was employed, utilizing panel data from 45 non-financial firms listed on the Nigerian Exchange Group over 10 years (2014–2023). The data were analyzed using a random-effects panel regression model. Findings reveal that audit committee independence and financial expertise have a statistically significant positive effect on the extent of FRD, while size and meeting frequency exhibit no significant relationship. These results underscore the importance of technical competence and autonomy in overseeing risk-related disclosures. The study is limited by its focus on a single emerging market and the exclusion of financial firms due to their distinct regulatory framework. Nonetheless, the findings have practical implications for regulators and boards seeking to enhance transparency through audit committee reform. Socially, improved FRD contributes to investor protection and economic stability. This study contributes to the corporate governance and risk disclosure literature by providing empirical evidence on the governance mechanisms that drive financial transparency in emerging markets, thereby offering original insights for policy and practice.