Effects of Moderated Audit Committee Operations on Financial Performance of NSE-Listed Banks in Kenya

Abstract

The research goal was to assess the effect of moderated audit committee operations on the financial performance of the NSE-listed banks in Kenya. The moderator is the CBK prudential guidelines. Likert collected responses were analyzed while the quantitative data from secondary data from the CBK supervisory reports were analyzed using descriptive ad inferential statistics. The research findings showed that the audit committee operations had no statistically significant effect on financial performance of Kenya’s NSE listed banks. The CBK prudential guidelines, which served as the moderator, did not change the fact that the audit committee operations were not statistically significant. Operations of the audit committee assist boards of directors in carrying out their governance duties, improving performance and competitiveness. Nonetheless, the study was carried out during the COVID-19 era, which may have contributed to the aforementioned results. The members of the audit committee should be chosen based on their qualifications, receive ongoing training, and have a designated reporting route to safeguard their independence and neutrality. The report also suggests that policies be established to govern audit functions, compensation, and fees in order to enhance the performance of NSE-listed banks. A suggestion to research the effects of internal audit procedures different from those used by the audit committee on financial performance of the NSE-listed banks in Kenya is imperative.