Abstract:
The inclusion of an accounting expert in the audit committee has been seen as a major feat recorded in the Nigerian Security and Exchange Commission Code reform in 2011. The code mandated all listed firms in Nigeria to make sure that at least one member possesses accounting skill that could help the committee perform its functions effectively. This study therefore, examined the effect of audit committee accounting expertise (when compared to finance and supervisory expertise) on the quality of financial reporting. The study measured financial reporting quality by reliability (total accrual quality) and relevance (audit report lag). The study considered fifteen listed money deposit banks for the period (2003-2012). Analyses were carried out using descriptive statistics and Panel Lest Square. It was found that, the inclusion of accounting expert in the audit committee showed a greater negative coefficient with quality financial report. This means having an accounting expert on the audit committee board, exerts greater positive impacts on quality financial report in term of reliability (TAQ) and relevance (ADLAG) when compared to finance and supervisory expertise. It is therefore recommends that, all stakeholders’ especially regulatory agencies should ensure compliance with the provision of Nigerian Security and Exchange Commission Code reform in 2011 in term of inclusion of accounting experts on the audit committee. This would also help the firms in reducing agency costs.
