Abstract
This study examined the effect of audit committee size and audit committee independence on environmental disclosure of non-finance service companies listed in Nigeria. Extant literature on this topic is more in developed countries where legal regulatory framework exists. There are limited empirical studies in developing countries like Nigeria that examine the effect audit committee size and independence on environmental disclosure, measured with Global Reporting Initiative checklist and their results have wide variant. Secondary data were collected from the annual reports of the sampled companies. 58 companies out of the population of 89 listed non-financial companies in Nigeria were sampled out. Descriptive statistics and multiple regression were employed for analysis. The study finds that the direct effect of audit committee size and audit committee independence on environmental disclosure is insignificant with probability values of 0.154 and 0.107, respectively. However, when moderated by audit committee share ownership, the effect of audit committee size on environmental disclosure of the sampled companies become significant with Probability value of 0.049. This finding suggests that audit committee size has positive and significant effect on environmental disclosure of non-finance companies listed in Nigeria where members of audit committee has shares in the company. Based on the findings, the study recommends that regulatory authorities should encourage companies to select members of audit committee with share ownership in the companies because it influences the effect of AC size on environmental disclosure. Keywords: Environmental disclosure, audit committee size, audit committee independence, audit committee share ownership, non-financial service companies, Nigeria DOI: 10.7176/RJFA/12-8-03 Publication date: April 30 th 2021
Highlights
Growing public awareness about the role of companies in environmental change has drawn the attention of many stakeholders
The results suggest that Audit committee (AC) size and AC independence have statistically significant effect on voluntary disclosure while, other independent variables do not have any significant effect
For the purpose of this research, the multiple regression analysis was employed to determine whether audit committee size and audit committee independence significantly affect environmental disclosure of non-financial service companies listed in Nigeria within the period of this study
Summary
Growing public awareness about the role of companies in environmental change has drawn the attention of many stakeholders. Literature on audit Committee size and independence, and the moderating role of AC share ownership as they affect environmental disclosure of non-finance companies listed in Nigeria, are reviewed . 189 companies were sampled and 664 years observation from the period of 20112015 They adopted panel data regression and audit committee size was found positive and significant with financial reporting quality. Content analysis was applied on the annual report and OLS was employed as the technique of analysis Their findings revealed that audit committee independence has no significant influence on the extent of environmental disclosure of listed companies in both countries examined. The finding of this study sharply differed from a research by Appuhami and Tashakor (2017) in which 300 Australian listed firms were examined to find out whether or not audit committee characteristics have significant effect on voluntary corporate social responsibility (CSR) and environmental disclosures. The study is about effect of Audit Committee characteristics, the dependent variable (voluntary disclosure) differs from environmental disclosure, being the focus of this research
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