Audit Committee Attributes and Financial Reporting Quality of the State-owned Commercial Enterprises in Kenya

Abstract

The study examines the relationship between audit committee attributes and financial reporting quality of State-owned Commercial Enterprises in Kenya. An analysis was done on annual reports and financial statements for 122 state-owned commercial for the period between 2008 and 2018. The results indicate that audit committee attributes has statistically significant relationship with financial reporting quality of State-owned Commercial Enterprises in Kenya. Results further reveal the audit committee independence has statistically significant and negative relationship with financial reporting whereas audit committee qualification, size and number of meetings held in a financial year had statistically significant and positive relationship with accrual quality. While audit committee independence and qualification exhibited statistically significant positive and negative relationship with qualitative characteristics respectively, it was evident that audit committee attributes had no significant relationship with timeliness in reporting. It is therefore, concluded that audit committee attributes impact financial reporting quality in State-owned Commercial Enterprises in Kenya requiring the appointing authorities to appoint audit committee members with the right skill mix and qualification to realize value addition services and improve financial reporting oversight.

Keywords: Audit Committee Attributes, Financial Reporting Quality, State-owned Commercial Enterprises

DOI: 10.7176/RJFA/11-14-12

Publication date:July 31^st 2020