Effect of Audit Committee Attributes on Audit Fees among Listed Financial Service Firms in Nigeria

Abstract

This study examined the effect of audit committee attributes on audit fees among listed financial service firms in Nigeria. The study used secondary data sources obtained from the published financial statements of the sampled firms listed for the period 2007 to 2020. The population of the study consists of 53 listed financial service firms in Nigeria. The study adopted correlational research design using ordinary least square regression as a tool of analysis. The study found out that the explanatory powers of audit committee size revealed a positive significant effect on the predictive factor (audit fees) while audit committee independence and meetings have significant negative effect on audit fees. Findings from the study indicated that firms with larger audit committee size have a tendency of enjoying lower audit fees. Consequently, in order to have a lower external audit costs, financial service firms in Nigeria are encouraged to consider larger audit committee size. The study recommended amongst others that there may be need for ensuring that non-executive directors of all the listed financial firms to be greater in the composition of the audit committee for effective monitoring activities. Also, the requirement of having at least 4 meetings (once quarterly) is apt and empirically proven in lowering the audit fees. Therefore, firms yet to adhere to it should be encouraged to comply.