AUDIT COMMITTEE CHARACTERISTICS AND EARNINGS MANAGEMENT AMONG LISTED DEPOSIT MONEY BANKS IN NIGERIA

Unethical financial reporting practice may be linked to audit committee characteristics; hence this study investigated the impact of audit committee characteristics on earnings management among listed deposit money banks in Nigeria. The study adopted an ex-post facto research design, with the population comprising twenty-four (24) deposit money banks listed on the Nigerian Exchange Group as of December 31, 2022. However, nine banks were selected for the study based on data availability. Data from audited annual reports of the sampled banks spanning from 2015 to 2022 were used for analysis. The data underwent relevant preliminary tests before being analyzed using a Robust Fixed Effect Regression Model. Empirical findings revealed that audit committee independence (ACIA) and audit committee financial expertise (ACFA) have substantial positive and negative impact on earnings management (EMA) respectively, while the impact of audit committee size (ACSA) was observed to be positive and insignificant. It is concluded that audit committee size (ACSA) and audit committee independence (ACIA) are not likely to reduce earnings management practice (EMA), whereas possession of adequate financial expertise by members of audit committee will possibly reduce cases of aggressive earnings management. Hence, it is advised to prioritize financial expertise when selecting members for audit committees, as this is expected to help mitigate and decrease earnings management practice.