Audit committee attributes and cosmetic accounting in Nigeria: The moderating effect of audit price
ISSN: 0268-6902
Article publication date: 29 November 2019
Issue publication date: 21 January 2020
Abstract
Purpose
The literature on the influence of audit committees (ACs) and cosmetic accounting (CSA) is scarce. This paper aims to examine the influence of AC attributes on CSA and how this relationship is moderated by the audit price (AUPR).
Design/methodology/approach
The study used pooled logistic regressions to analyse 624 firm-year observations of listed companies in Nigeria from 2008 to 2016.
Findings
The results show that AC financial accounting expertise, AC legal expertise and female AC membership were negatively related to CSA. The negative relationship is highly pronounced when a firm incurs higher audit fees. Results for the robustness checks were similar, even with changes to the measurements of dependent and independent variables and alternative estimation.
Practical implications
This study can benefit policymakers and regulators, enabling them to better appreciate the importance of AC attributes and AUPR in curtailing artificial manipulation and enhancing financial reporting quality.
Social implications
This study can benefit policymakers and regulators, enabling them to better appreciate the importance of AC attributes and AUPR in curtailing artificial manipulation and enhancing financial reporting quality.
Originality/value
The findings provide an initial insight into the moderating effect of AUPR on the relationship between AC attributes and CSA.
Keywords
Citation
Bala, H., Amran, N.A. and Shaari, H. (2020), "Audit committee attributes and cosmetic accounting in Nigeria: The moderating effect of audit price", Managerial Auditing Journal, Vol. 35 No. 2, pp. 177-206. https://doi.org/10.1108/MAJ-06-2018-1897
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited