Audit and Risk Committees Synergy in Curbing Corporate Tunnelling: Evidence from Listed Nigerian Consumer Goods Firms
- 6 days ago
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Authors: Osarenren Osasere AIGIENOHUWA and Eghosa Isabel UMASABOR
Abstract
The study investigated the impact of audit and risk committee synergy on corporate tunnelling of listed Nigerian consumer goods firms. The paper specifically examined the impact of audit committee size, risk committee size, and governance synergy on corporate tunnelling proxied by related party asset intensity. The theoretical framework of the study suggested by Agency Theory which explains the conflict of interest due the separation of ownership and control of a firm. The study used ex-post facto research design, relying on secondary data derived from the annual reports and accounts of 18 listed Nigerian consumer goods firms covering the period of 2012–2024. The analysis of the data was performed using descriptive statistics, correlation analysis, diagnostic tests and panel regression technique. The main estimation technique used was robust regression estimation due to diagnostic tests revealing heteroskedasticity and non-normality. The result showed that the size of the audit committee had a positive but insignificant impact on corporate tunnelling. The size of the risk committee had a positive and significant impact on tunnelling of firms in the sample. The study found that governance synergy had negative but not statistically significant effect on corporate tunnelling which suggests there is weak coordination between audit and risk committees in constraining tunnelling. As the study concluded, governance committee structures will not reduce expropriations effectively if their coordination and monitoring quality is appalling. There is need for a more stringent operational effectiveness and collaborative oversight of governance committees of Nigerian firms.
Keywords: Corporate Tunnelling; Audit Committee; Risk Committee; Governance Synergy; Related-Party Transactions