Audit committee and financial reporting timeliness: fresh insight from dynamic models in Nigerian Listed Firms

Abstract

This paper explores shareholder representatives' effect on the audit committee, financial report timeliness, and how institutional ownership moderates this relationship. The paper uses a dynamic panel model using the Generalised Method of Moment (GMM) to control for potential endogeneity. The results indicate that shareholders on the audit committee significantly reduce financial reporting timeliness. In particular, the shareholders play an active part in improving the financial reporting process and timeliness. Their presence provides a good atmosphere in which external auditors can effectively operate. Both the static and dynamic estimations confirm the significance of the effects. This study will benefit regulators and policymakers, enabling them to appreciate better the importance of shareholders’ representatives and institutional ownership in curbing reporting lags and improving the timeliness of financial reporting.