Effect Of Audit Committee Composition On Firms’ Performance (A Comparative Study Of Quoted Firms’ On Nigerian Stock Exchange:- Ajomiwe Oluomachi

ABSTRACT

This study examine the relationship between three characteristics of audit committee composition (Audit committee size, Audit committee independence and frequency of audit committee meeting and firm performance (return on equity “ROE”) with the sample of 20 listed firms on the Nigeria stock exchanges as at 2012 fiscal year. Using cross section data, multiple regression analysis and employing the service of Statistical Package for Social Science (SPSS) evaluation package version 20. The result reveals that there is a relationship between audit committee composition and ROE and that 53% ofthe total variable (ROE) is explained by the independent variables (characteristics of audit committee composition). On the specifics, the results shows that audit committee size has a significant positive relationship with return on equity. The audit committee independence measured by the number of shareholders representatives, executive directors, and independent directors on the audit committee, has significant negative relationship with return on equity. The audit committee meetings shows insignificant negative relationship with return on equity. The researcher recommend that the audit committee should be structured to a sizable number to enhance the committee effectiveness, which will help the performance ofthe firm.