Dr. Abubakar Balarabe Karaye1, Dr. Hussaini Bala2, Gran Seerwan3, Sallar Ashqi Kareem4
Accounting Department, Banking and Finance Department
Faculty of Administrative Sciences and Economics, Tishk International University
Erbil, Kurdistan Region- Iraq
E-mail: [email protected], [email protected], [email protected], [email protected]
DOI: 10.23918/ICABEP2022p32
Abstract
The aim of this study is to investigate the relationship between the board of directors’ audit committees and the financial performance of companies, by looking at the board audit committees’ characteristics of publicly listed companies of the four (4) biggest African financial markets from each region of the continent. To get the full picture of the effect of audit committees on financial performance, the research focuses on the periods after the last global financial crisis and before the advent of the Covid-19 crisis. Accordingly, both financial and nonfinancial data were collected from the annual reports of companies from 2013-to 2019. As such, panel data was used with a set of 336 company-year observations. Features of the audit committee were used as independent variables of the study. These include an independent director as the chairperson of the committee, whether the committee guard the integrity of financial reporting of a company, the committee recommendation of the external auditor, the committee recommendation of external auditor’s fee, the committee regularly report to the board of directors, the committee meets and hear the company’s external auditor, and whether the committee effectively monitors the management of the company. Furthermore, for the dependent variable, Return on Asset (ROA) and Return on Equity (ROE) were used as the measures of the financial performance of a company. The data were analyzed using panel regression (Fixed and Random Effect Models). The findings are expected to show that audit committee characteristics have a positive and significant relationship with the companies’ financial performance measures (ROA and ROE) in Africa. The findings of this study will be useful for regulatory authorities in providing laws on corporate governance.
Keywords: Board audit committee, financial performance, companies in Africa.
ICABEP2022
4th International Conference on Accounting, Business, Economics and Politics
Organized by
Tishk International University, College of Administration and Economics, Salahaddin University-Erbil, and
University of Szczecin, Poland.
