RISK MANAGEMENT COMMITTEE AND AUDIT COMMITTEE ON AUDIT PRICING OF LISTED CONSUMER GOODS MANUFACTURING COMPANIES IN NIGERIA

Abstract

Risk management and audit committees perform an important function in safeguarding the
integrity and quality of corporate financial reporting and external audit process. This study
investigated the relationship between risk management and audit committees on audit pricing of
listed consumer goods manufacturing firms in Nigeria. The specific objectives were to investigate
risk management and audit committees size, independence, meeting and financial expertise on
audit fees. The population of the study was twenty one (21) listed consumer goods
manufacturing firms as at year end 2020. Probability sampling technique was used to determine
the sample for the study. Using Taro Yamene method a sample size of twenty 20 firms was
selected for the study. Secondary data from the published annual financial reports of the
sampled firms were used for data gathering. Descriptive statistics, correlation coefficient and
multivariate analysis were used for data analysis. The results showed that risk management and
audit committees size positively and significantly affects audit fees; risk management and audit
committees independence positively and significantly affects audit fees; risk management and
audit committees meetings positively and significantly affects audit fees; and risk management
and audit committees financial expertise positively and significantly affects audit fees. On the
basis of the findings, the study concluded that risk management and audit committees size
positively and significantly the amount of audit fees of listed consumer goods manufacturing
firms in Nigeria. The study recommends among others that Supervisory and monitoring
organizations should provide quality guiding principle on minimum requirement for board size,
number of experts, number and timing of meetings as well as empowering the shareholder
associations to be active and report compliance