EFFECT OF NON-EXECUTIVE DIRECTORS AND INDEPENDENT DIRECTORS ON AUDIT QUALITY OF LISTED OIL AND GAS COMPANIES IN NIGERIA

David, Christopher (), Uwaleke, Uche Joseph and Aza, Solomon M.
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David, Christopher: Department of Accounting, Postal: Faculty of Administration, Nasarawa State University, Keffi, https://www.afarng.org/jfafi/
Uwaleke, Uche Joseph: Department of Accounting, Postal: Faculty of Administration, Nasarawa State University, Keffi, https://www.afarng.org/jfafi/
Aza, Solomon M.: Department of Accounting, Postal: Faculty of Administration, Nasarawa State University, Keffi,, https://www.afarng.org/jfafi/

Journal of Forensic Accounting & Fraud Investigation (JFAFI), 2020, vol. 5, issue 1, 30-61

Abstract: This study examined the effect of non-executive directors and independent directors as important features of corporate governance on audit quality of oil and gas companies in Nigeria. The study adopted the ex-post facto research design. Secondary data were extracted from the annual reports of 10 oil and gas firms for the period 2009 to 2018. The logistic regression technique was used for data analyses and tests of hypotheses. The nonexecutive director was measured by the proportion of non-executive directors to executive directors on the board while the independent director was measured using the proportion of independent directors to nonindependent directors on the board and audit quality measured using Big4. From the analysis, it was found that non-executive directors have a negative but significant influence on audit quality while independent directors have a positive and significant effect on audit quality of financial reports of quoted oil and gas companies in Nigeria. Independent director is a requirement for one of the board's most fundamental responsibilities that are, unbiased oversight of management. Based on this assertion and findings from this study, it is recommended that larger non-executive directors and independent directors should be on the boards of oil and gas companies in Nigeria as this will improve the audit quality of their financial reports.

Keywords: Audit Quality; Non-Executive Directors; Independent Directors; Nigeria. (search for similar items in EconPapers)
Date: 2020
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Journal of Forensic Accounting & Fraud Investigation (JFAFI) is currently edited by Godwin Emmanuel Oyedokun, Muhammad Akaro Mainoma and Suleiman A. S. Aruwa

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