Title: EFFECT OF AUDIT COMMITTEE ATTRIBUTES ON THE MARKET VALUE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Authors: Amity Agi Ijuwo, Prof. Terungwa Azende and Patience Ote Ola (Ph.D)

Abstract: This study examined the effect of audit committee attributes on the market value of listed Deposit Money Banks in Nigeria. Specifically, the study investigated the effects of audit committee meetings, audit committee diversity, and audit committee size on market value, while controlling for bank size and bank age. The study was motivated by the persistent fluctuations in market valuation of Nigerian banks despite continued improvements in corporate governance practices and regulatory reforms. The study adopted an ex-post facto research design and utilized secondary data extracted from the published annual reports, audited financial statements, and corporate governance reports of selected Deposit Money Banks listed on the Nigerian Exchange Group (NGX). The population consisted of all thirteen (13) listed Deposit Money Banks in Nigeria as of 31 December 2024; however, due to data availability constraints, ten (10) banks were purposively selected. Data covering an eleven-year period from 2014 to 2024 were analyzed using descriptive statistics, correlation analysis, diagnostic tests, and panel regression estimation. The findings revealed that audit committee meetings have a positive and statistically significant effect on market value. Audit committee diversity exhibited a negative but statistically insignificant effect on market value. Audit committee size was found to have a positive and statistically significant effect on market value. The study concluded that audit committee attributes remain important corporate governance mechanisms for enhancing market value among listed Deposit Money Banks in Nigeria. Specifically, active audit committee meetings and optimal committee size contribute significantly to improving investor confidence and shareholder value, while diversity alone may not guarantee improved market outcomes. Accordingly, the study recommended that Deposit Money Banks should strengthen the frequency and effectiveness of audit committee meetings, maintain optimal audit committee size, promote competence-driven diversity practices, and improve governance compliance to enhance market valuation and sustain long-term shareholder wealth.

Keywords: Audit committee attributes, audit committee meetings, audit committee diversity, audit committee size, market value, Tobin’s Q, Deposit Money Banks, Nigeria.

PDF Download