The Relationship between Audit and Risk Management Committees on Financial Performance of Non-financial Companies in Nigeria: A Conceptual Review

Edogbanya, Adejoh; Kamardin, Hasnah

doi:10.5901/mjss.2015.v6n3p206

Cited by 5 publications

(7 citation statements)

References 36 publications

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“…The proportion of non-executive directors in the committee signifies audit committees' independence. Audit committees are expected to be independent as lack of independence impairs the ability of the audit committee to monitor risks (Edogbanya and Kamardin, 2015). The independence of audit committees' members on the board tends to contribute to a high market value as they have an in-depth understanding of the risky nature of the firm.…”

Section: Audit Committee Independence and Financial Riskmentioning

confidence: 99%

Does Audit Committee Characteristics Promote Risk Management Practices in Nigerian Listed Firms?

Ojeka¹,

Adeboye²,

Dahunsi³

2021

AFR

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There has been a huge and deluge of risk threatening industries at an unequalled magnitude in recent times. As such, the board of directors and senior executives are increasingly expected to manage their various organizations' risk portfolios, affecting their financial performance. This has led to the assigning of the risk assessment role to the audit committee. The board of directors and its audit committee play an essential function in Enterprise Risk Management (ERM) by building up the right condition or tone-at-the-top. Given the board's responsibilities for representing the interests of shareholders, it plays a vital role in overseeing management's approach to ERM. This study examined the relationship between audit committee characteristics and risk management of some selected listed firms in a developing country like Nigeria. The study used secondary data to describe the dependent variable (financial risk decomposed into credit risk and liquidity risk) and the explanatory variables (decomposed into audit committee accounting expertise, audit committee meetings, audit committee independence and audit committee gender). The study used pair sample t-test, student t-test, Pearson Moment Correlation and random panel data estimator for twenty (20) selected listed firms for 2012-2016. Findings indicate that there is a negative between audit committee accounting expertise and financial risk. This revealed that Accounting Expertise in Audit Committees are likely to involve in activities and practices to curb financial risk. In addition, the Audit committee meeting indicates a negative relationship with credit risk. Audit committee gender and audit committee independence have a negative effect on liquidity risk. Therefore, this study recommends that Audit committees embrace Enterprise Risk Management (ERM) to manage risks effectively across the organization. Risk management processes should be one of the major points of discussion during audit committee meetings.

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Section: Audit Committee Independence and Financial Riskmentioning

confidence: 99%

Does Audit Committee Characteristics Promote Risk Management Practices in Nigerian Listed Firms?

Ojeka¹,

Adeboye²,

Dahunsi³

2021

AFR

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“…Agency theory explains the conflict of interest between the principal and the agent of the entities. This theory outlines the two main problems of the agency costs and the information asymmetry (Edogbanya & Kamardin, 2015). The established corporate governance charter of Papua New Guinea could minimize agency costs and information asymmetry.…”

Section: Agency Theorymentioning

confidence: 99%

“…Steward theory is the opposite of the agency theory. The management of the entities are more concerned with the shareholders interest and their welfare than in improving the financial performance (Edogbanya & Kamardin , 2015). The management of the listed companies ensures that shareholders achieve their goals.…”

Section: Steward Theorymentioning

confidence: 99%

Impact of Corporate Governance Practices on Financial Performance of Listed Companies in Papua New Guinea

Sivaruban

2023

FMIR

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The main purpose of this research is to examine the impact of corporate governance practices on the financial performance of listed companies in Papua New Guinea from 2018 to 2022. The corporate governance practices are established to monitor and evaluate the conduct of the management of the public listed companies. The Corporate governance charter is established in Papua New Guinea as part of the best practice to assist decision-making on the board of directors. The attributes of corporate governance practices of this study are at the board size, board diversity and the frequency of board meetings. The literature review of the study covers the theoretical framework and research attributes. This study has selected a list of 7 companies out of the twelve companies in Papua New Guinea, where the capital market has very limited growth in the country. A quantitative research approach was employed to conduct this study and using the secondary data for this research. The secondary data were collected from the respective listed companies’ websites and those data are error-free since the financial statements of the listed companies were audited by external auditors. A total of 35 annual reports of the listed company were collected for the research and a convenient sample method is employed for the study. The overall findings of this research have established positive relationships between the board size and the board diversity with the return of equity. The negative relationship was established between board size, board diversity with the return of assets and the Tobin-Q respectively. Furthermore, the negative relationships were identified between the frequency of board meetings with return of assets, equity and the Tobin-Q respectively. The study has indicated that the frequency of board meetings had increased substantially during COVID-19 to mitigate contingency risk. The findings of this study can be used by the regulatory body and listed companies to enhance the effectiveness and efficiency of corporate governance practices so that the overall corporate governance practices could be improved in the future.

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“…Hence, RCE effectiveness emphasizes the features that promote proficiency in operations of the RCE. However, researchers and other stakeholders are confident that successes in business operations are largely dependent on the risk control efficiency of the entity (Edogbanya & Kamardin, 2015). Hence, RCE is vested with the power to minimize the risks of the corporation to its risk appetite; this study considered the attributes of the risk RCE like: RCE size, RCE diligence, RCE expertise, RCE composition and RCE gender diversification.…”

Section: Literature Review and Research Hypothesesmentioning

confidence: 99%

Risk Committee Effectiveness and Financial Performance Indicator of Quoted Firms in Selected African Countries

Odubuasi¹,

Ofor²,

Ugbah³

2022

JFRM

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The rise in contemporary risk and the resultant corporate failures has necessitated the need for the required attributes of risk committee that would minimize risk of firms. To this end, this study was set to find out the effect of risk committee effectiveness (RCE) on financial successes of quoted banks in selected three African countries. The study spanned from 2009 to 2018. The study focused specifically on risk committee diligence, committee composition, committee diversity, committee expertise, committee size and return on equity (ROE) of the countries selected from Africa namely Nigeria, South Africa and Ghana. More so, we controlled for financial leverage. Ex post facto research design was adopted for the study and panel data in relation to the study were sourced from the annual reports of the chosen banks in the selected countries. The study patterned after the fixed effect model (FEM) since the Hausman test supports the FEM. The FEM reported that the effect of RCE diligence and RCE compositions on bank performance in Nigeria, South Africa and Ghana is highly significant statistically at 5% level. Hence, the study concludes that RCE vis-à-vis risk committee diligence, committee compositions and leverage factors should be pivotal to the formulation of risk management committee of organisations.

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The Relationship between Audit and Risk Management Committees on Financial Performance of Non-financial Companies in Nigeria: A Conceptual Review

Abstract: In recent years, cases of dissatisfaction from shareholders in reflection and

Cited by 5 publications

References 36 publications

Does Audit Committee Characteristics Promote Risk Management Practices in Nigerian Listed Firms?

Does Audit Committee Characteristics Promote Risk Management Practices in Nigerian Listed Firms?

Impact of Corporate Governance Practices on Financial Performance of Listed Companies in Papua New Guinea

Risk Committee Effectiveness and Financial Performance Indicator of Quoted Firms in Selected African Countries

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