Moderating Effect of Audit Committee Expertise on Fraud Risk Factors and Earnings Quality of Listed Nigerian Consumer Goods Firms

Abstract

This study investigates the moderating effect of audit committee expertise on fraud risk factors and earnings quality of listed Nigerian Consumer Goods Firms for the period of eleven (11) years spanning from 2010-2020. The listed consumer goods firms are twenty (20) in number from the Nigeria Stock Exchange out of which seventeen (17) were employed for the study. This study is necessitated due to the persistent rise in the level of fraud scandals reported in the industry which have led to apprehensions about the legitimacy of most firms’ earning qualities. The study has employed the use of the FGLS regression model using Stata to analyze the study. The data were obtained from the secondary source through the audited financial reports and accounts of the listed firms. The findings of the study revealed that independent directors (IND) have a significant impact on the earnings quality of the listed firms while audit committee expertise significantly moderates the relationship between fraud risk factors and earnings quality of the listed consumer goods firms in Nigeria. Therefore, what is left to be done is for the management of the listed firms to devise ways of increasing the proportion of independent directors on the board to increase earnings quality reporting.