Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya

Authors

Collins Kapkiyai  1 , Josephat Cheboi  2 , Joyce Komen  3
Moi University, Kenya 1 , Moi University, Kenya 2 , Moi University, Kenya 3
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Main Article Content

Abstract

Objective: The paper sought to investigate the role of an effective audit committee in controlling earnings management practices.


Design / Methodology: A panel data sourced from the audited financial reports of firms listed at the Kenyan Nairobi Securities Exchange for the periods between 2004 and 2017 were analyzed using a panel regression model.


Findings: Audit committee effectiveness proved an important monitoring mechanism for earnings management. The independence, Meeting frequency, and financial expertise of the audit committee evidenced a negative and significant effect on earnings management.


Practical Implications: Firms need to ensure that their audit committees operate effectively. This is achieved through enhancing their independence, ensuring optimal meeting frequency, and a higher number of members with financial expertise for fewer earnings management.


Originality: The paper suggests the ways through which audit committee effectiveness can be enhanced to reduce earnings management amid rampant global financial scandals.

Article Details

Kapkiyai, C., Cheboi, J. ., & Komen, J. (2020). Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya. SEISENSE Journal of Management, 3(2), 31-44. https://doi.org/10.33215/sjom.v3i2.292
Research Articles

Josephat Cheboi, Moi University, Kenya

Ag.Dean School of Business and Economics

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