Audit committee attributes and cosmetic accounting in Nigeria: The moderating effect of audit price
Purpose The literature on the influence of audit committees (ACs) and cosmetic accounting
(CSA) is scarce. This paper aims to examine the influence of AC attributes on CSA and how
this relationship is moderated by the audit price (AUPR). Design/methodology/approach The
study used pooled logistic regressions to analyse 624 firm-year observations of listed
companies in Nigeria from 2008 to 2016. Findings The results show that AC financial
accounting expertise, AC legal expertise and female AC membership were negatively …
(CSA) is scarce. This paper aims to examine the influence of AC attributes on CSA and how
this relationship is moderated by the audit price (AUPR). Design/methodology/approach The
study used pooled logistic regressions to analyse 624 firm-year observations of listed
companies in Nigeria from 2008 to 2016. Findings The results show that AC financial
accounting expertise, AC legal expertise and female AC membership were negatively …
Purpose
The literature on the influence of audit committees (ACs) and cosmetic accounting (CSA) is scarce. This paper aims to examine the influence of AC attributes on CSA and how this relationship is moderated by the audit price (AUPR).
Design/methodology/approach
The study used pooled logistic regressions to analyse 624 firm-year observations of listed companies in Nigeria from 2008 to 2016.
Findings
The results show that AC financial accounting expertise, AC legal expertise and female AC membership were negatively related to CSA. The negative relationship is highly pronounced when a firm incurs higher audit fees. Results for the robustness checks were similar, even with changes to the measurements of dependent and independent variables and alternative estimation.
Practical implications
This study can benefit policymakers and regulators, enabling them to better appreciate the importance of AC attributes and AUPR in curtailing artificial manipulation and enhancing financial reporting quality.
Social implications
This study can benefit policymakers and regulators, enabling them to better appreciate the importance of AC attributes and AUPR in curtailing artificial manipulation and enhancing financial reporting quality.
Originality/value
The findings provide an initial insight into the moderating effect of AUPR on the relationship between AC attributes and CSA.
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