Audit committees in Nigeria

A new requirement in the Nigerian Companies and Allied Matters Act (CAMA) of 1990 is the introduction of audit committees as an additional layer of control and certification in the bid to make annual accounts of public corporations more acceptable and reliable. This paper reviews the law and practice of audit committees in Nigeria. It argues that for audit committees to become more useful in the Nigerian context there is need for changes to be made in both its law and practice. Key areas of concern include the need to: determine and codify the qualification for membership of the committee given its technical nature; allow appropriate remuneration for committee members, and; the determination of appropriate membership tenure for such committees. The above review is necessary if audit committees are to be in a position to effectively perform their oversight functions aimed at improving the quality and information content of corporate financial reports.