THE IMPACT OF AUDIT COMMITTEE ON CORPORATE GOVERNANCE IN NIGERIAN MANUFACTURING SECTOR

Abstract

One of the vital purposes of establishment of firms quoted in the stock market is shareholders maximization. In order to achieve this purpose, there is need for compliance of corporate governance rule established by the regulatory authorities of different industries. The study examines internal audit committee and corporate governance of chosen firms in Nigerian manufacturing sector. The study adopted causal research design and utilized secondary data. The data were obtained from the annual reports of the chosen firms which are Nigerian Brewery Plc and Nestle Nigeria Plc from 2008 to 2017. The study employed descriptive statistics, correlation and regression as the statistical tools for the study. The study found that audit committee size has negative and insignificant impact on the board size; audit committee size has a positive effect on non-executive director size but there is no significant effect; there is no positive and significant effect of audit committee size on executive director size of firms in the manufacturing sector. The study concluded that audit committee size has no significant effect on corporate governance. It was recommended that Composition of internal audit committee should be done by the shareholders and must be fully independent to carry out their duties; and shareholders should be represented in the composition of audit committee in the manufacturing firms.