The Role of the Risk Committee in Detecting Financial Statement Fraud in Nigeria
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| Natura: | Recurso digital |
| Lingua: | inglese |
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Zenodo
2026
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| _version_ | 1866902081636401152 |
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| author | Yahaya, Onipe Adabenege |
| author_facet | Yahaya, Onipe Adabenege |
| contents | <p class="MsoNormal"><span>Financial statement fraud remains one of the most damaging forms of corporate misconduct, eroding investor confidence, distorting resource allocation, and undermining the integrity of capital markets in emerging economies. In Nigeria, where corporate governance infrastructure is still maturing, the question of whether board-level oversight mechanisms, particularly the risk committee, can serve as effective deterrents to fraudulent financial reporting is both timely and consequential. This study investigates the role of the risk committee in detecting financial statement fraud among 148 listed firms on the Nigerian Exchange Group (NGX) over the period 2010 to 2025, employing an ex-post facto research design and panel regression methodology. Financial statement fraud is proxied using the Beneish M-Score and the F-Score (Dechow et al., 2011), while risk committee characteristics examined include committee size, independence, expertise (financial and risk), meeting frequency, and gender diversity. Control variables incorporated in the model include firm size, return on assets (ROA), leverage, Big 4 auditor dummy, board independence, industry dummies, and year dummies. The fixed effects and random effects panel regression results, adjudicated by the Hausman test, reveal that risk committee independence, financial expertise, and meeting frequency are significantly and negatively associated with the likelihood of financial statement fraud. Conversely, larger but less independent risk committees show no significant protective effect, suggesting that composition quality matters more than committee size. These findings are robust to alternative fraud proxies, post-estimation diagnostics, and endogeneity corrections via the system Generalized Method of Moments (GMM). The study contributes to the corporate governance and financial fraud literature by providing one of the most comprehensive longitudinal analyses of the risk committee–fraud nexus in a Sub-Saharan African context. Practical implications are offered for regulators, boards of directors, institutional investors, and policymakers in Nigeria and other emerging markets.</span></p> |
| format | Recurso digital |
| id | zenodo_https___doi_org_10_5281_zenodo_20363941 |
| institution | Zenodo |
| language | eng |
| publishDate | 2026 |
| publisher | Zenodo |
| record_format | zenodo |
| spellingShingle | The Role of the Risk Committee in Detecting Financial Statement Fraud in Nigeria Yahaya, Onipe Adabenege Risk committee Financial statement fraud Nigeria Listed firms Panel Regression <p class="MsoNormal"><span>Financial statement fraud remains one of the most damaging forms of corporate misconduct, eroding investor confidence, distorting resource allocation, and undermining the integrity of capital markets in emerging economies. In Nigeria, where corporate governance infrastructure is still maturing, the question of whether board-level oversight mechanisms, particularly the risk committee, can serve as effective deterrents to fraudulent financial reporting is both timely and consequential. This study investigates the role of the risk committee in detecting financial statement fraud among 148 listed firms on the Nigerian Exchange Group (NGX) over the period 2010 to 2025, employing an ex-post facto research design and panel regression methodology. Financial statement fraud is proxied using the Beneish M-Score and the F-Score (Dechow et al., 2011), while risk committee characteristics examined include committee size, independence, expertise (financial and risk), meeting frequency, and gender diversity. Control variables incorporated in the model include firm size, return on assets (ROA), leverage, Big 4 auditor dummy, board independence, industry dummies, and year dummies. The fixed effects and random effects panel regression results, adjudicated by the Hausman test, reveal that risk committee independence, financial expertise, and meeting frequency are significantly and negatively associated with the likelihood of financial statement fraud. Conversely, larger but less independent risk committees show no significant protective effect, suggesting that composition quality matters more than committee size. These findings are robust to alternative fraud proxies, post-estimation diagnostics, and endogeneity corrections via the system Generalized Method of Moments (GMM). The study contributes to the corporate governance and financial fraud literature by providing one of the most comprehensive longitudinal analyses of the risk committee–fraud nexus in a Sub-Saharan African context. Practical implications are offered for regulators, boards of directors, institutional investors, and policymakers in Nigeria and other emerging markets.</span></p> |
| title | The Role of the Risk Committee in Detecting Financial Statement Fraud in Nigeria |
| topic | Risk committee Financial statement fraud Nigeria Listed firms Panel Regression |
| url | https://doi.org/10.5281/zenodo.20363941 |