ABSTRACT

The study examined the effect of audit committee characteristics on value relevance of financial reports of listed manufacturing firms in Nigeria, utilizing time series data spanning a 7 year period, from 2015 to 2021 of 34 listed manufacturing firms. The study specifically examined the effect of audit committee characteristics on value relevance of financial reports of listed manufacturing firms in Nigeria. The study extracted data in the research variables from various financial statements and from the website of the Nigeria exchange group. The study engaged the Levin,Lin & Chut* unit root test and the 1^st difference generalized method of moments used for data analyses. The various unit root test results indicated that the variables are stationary at level. The findings revealed that audit committee independence and audit committee size exert a negative but significant effect on market price per share while audit committee expertise revealed a positive but insignificant effect on market price per share and audit committee frequency of meetings revealed positive and significant effect on market price per share and the robustness check was done with ACI, ACZ, ACEx and ACFm on MPS, the result showed that ACI,ACZ, ACEx and ACFm shows stability of the findings of variables. On the basis of these findings, the study therefore recommends that more than one audit committee member with financial background will be an advantage in enhancing the value relevance of financial reports. Also, more period of time should be put into consideration and cross sessional data pool in future studies. Audit committees must have authority over their own budgets and over external auditors. It is through these protections that independence will increase and investors will come to trust the financial reports released by companies which will bring about value relevance of such financial reports of listed manufacturing firms in Nigeria.