INTERNATIONAL FINANCIAL REPORTING STANDARD ADOPTION AND AUDIT REPORT LAG OF DEPOSIT MONEY BANKS IN NIGERIA
Journal Title: Gusau Journal of Accounting and Finance - Year 2021, Vol 2, Issue 2
Abstract
This study examined whether the adoption of International Financial Reporting Standards (IFRS) has affected the effect of certain corporate governance variables on Audit Report Lag (ARL) of Deposit Money Banks (DMBs) in Nigeria. The study adopted a correlational research design as a guide. The population of the study consisted of Fifteen (15) Deposit Money Banks (DMBs) that are listed throughout the period (2009 - 2020). Given the research design, multiple regression technique was employed as technique of data analysis. Also, paired t test was conducted to test the hypothesis of the study. The findings revealed that not all audit committee characteristics are better associated with audit report lag after IFRS adoption. While audit committee independence and audit committee financial expertise have significantly reduced audit report lag following the adoption, audit fees and audit exercise quality still do not reduce audit delay even after adoption. It is therefore recommended that since having more independent directors on the audit committee improves its oversight function, in addition to the mandatory three non-executive directors on the audit committee, a leeway should be given whereby at least one independent director can be added to the committee. The requirement should however be optional rather than mandatory. In respect of financial literacy, there is need to establish more clear cut criteria (either through regulation or by company charter) that will ensure that it is not only directors on the audit committee that are financially literate but that elected shareholders into the audit committee are also so literate. To this effect, the profiles of all audit committee members should be published in the bank’s annual reports just as its being done for the board of directors. With respect to audit fees, the study recommends that management should structure the fees in such a manner that part of the pay is contingent not just on audit exercise quality but also upon speed of completion of the audit work. The contingent component should be agreed upon at the time of engagement.
Authors and Affiliations
Aisha Nuhu Mohammed, Mustapha Muhammad Bagudo, Mahmoud Rufa’i Mahmoud, Magaji Adamu
Keywords
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