Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya
Objective: The paper sought to investigate the role of an effective audit committee in controlling earnings management practices. Design / Methodology: A panel data sourced from the audited financial reports of firms listed at the Kenyan Nairobi Securities Exchange for the periods between 2004 a...
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| Format: | Article |
| Language: | English |
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Seisense
2020-02-01
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| Series: | SEISENSE Journal of Management |
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| Online Access: | https://journal.seisense.com/jom/article/view/292 |
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| _version_ | 1850158272287342592 |
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| author | Collins Kapkiyai Josephat Cheboi Joyce Komen |
| author_facet | Collins Kapkiyai Josephat Cheboi Joyce Komen |
| author_sort | Collins Kapkiyai |
| collection | DOAJ |
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Objective: The paper sought to investigate the role of an effective audit committee in controlling earnings management practices.
Design / Methodology: A panel data sourced from the audited financial reports of firms listed at the Kenyan Nairobi Securities Exchange for the periods between 2004 and 2017 were analyzed using a panel regression model.
Findings: Audit committee effectiveness proved an important monitoring mechanism for earnings management. The independence, Meeting frequency, and financial expertise of the audit committee evidenced a negative and significant effect on earnings management.
Practical Implications: Firms need to ensure that their audit committees operate effectively. This is achieved through enhancing their independence, ensuring optimal meeting frequency, and a higher number of members with financial expertise for fewer earnings management.
Originality: The paper suggests the ways through which audit committee effectiveness can be enhanced to reduce earnings management amid rampant global financial scandals.
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| format | Article |
| id | doaj-art-1863efe68df742d68500c2ccbbfbe686 |
| institution | OA Journals |
| issn | 2617-5770 |
| language | English |
| publishDate | 2020-02-01 |
| publisher | Seisense |
| record_format | Article |
| series | SEISENSE Journal of Management |
| spelling | doaj-art-1863efe68df742d68500c2ccbbfbe6862025-08-20T02:23:56ZengSeisenseSEISENSE Journal of Management2617-57702020-02-013210.33215/sjom.v3i2.292Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in KenyaCollins Kapkiyai0https://orcid.org/0000-0002-7171-6212Josephat Cheboi1Joyce Komen2Moi University, KenyaMoi University, KenyaMoi University, Kenya Objective: The paper sought to investigate the role of an effective audit committee in controlling earnings management practices. Design / Methodology: A panel data sourced from the audited financial reports of firms listed at the Kenyan Nairobi Securities Exchange for the periods between 2004 and 2017 were analyzed using a panel regression model. Findings: Audit committee effectiveness proved an important monitoring mechanism for earnings management. The independence, Meeting frequency, and financial expertise of the audit committee evidenced a negative and significant effect on earnings management. Practical Implications: Firms need to ensure that their audit committees operate effectively. This is achieved through enhancing their independence, ensuring optimal meeting frequency, and a higher number of members with financial expertise for fewer earnings management. Originality: The paper suggests the ways through which audit committee effectiveness can be enhanced to reduce earnings management amid rampant global financial scandals. https://journal.seisense.com/jom/article/view/292Earnings ManagementAudit Committee EffectivenessAudit Committee IndependenceAudit Committee Meeting frequencyAudit Committee Financial Expertise |
| spellingShingle | Collins Kapkiyai Josephat Cheboi Joyce Komen Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya SEISENSE Journal of Management Earnings Management Audit Committee Effectiveness Audit Committee Independence Audit Committee Meeting frequency Audit Committee Financial Expertise |
| title | Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya |
| title_full | Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya |
| title_fullStr | Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya |
| title_full_unstemmed | Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya |
| title_short | Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya |
| title_sort | audit committee effectiveness and earnings management among publicly listed firms in kenya |
| topic | Earnings Management Audit Committee Effectiveness Audit Committee Independence Audit Committee Meeting frequency Audit Committee Financial Expertise |
| url | https://journal.seisense.com/jom/article/view/292 |
| work_keys_str_mv | AT collinskapkiyai auditcommitteeeffectivenessandearningsmanagementamongpubliclylistedfirmsinkenya AT josephatcheboi auditcommitteeeffectivenessandearningsmanagementamongpubliclylistedfirmsinkenya AT joycekomen auditcommitteeeffectivenessandearningsmanagementamongpubliclylistedfirmsinkenya |