Reliability of the audit committee in weak institutional environments: Evidence from Nigeria

Relying on institutional theory, this article presents external stakeholders’ perspectives on the factors that influence audit committees’ independence and reliability in a weak institutional context. We conducted 37 semi-structured interviews with two critical external stakeholder groups (27 experienced professional investors and 10 senior regulatory officials) in the Nigerian banking sector. Our study finds that the independence of audit committee members, being an ‘a posteriori’ rather than an ‘a priori’ accountability verification, bears institutional contextual bias. Consequently, we unpack five factors, namely allegiance to the dominant owner, poor professional conduct, corruption, nepotism and opportunism, and impunity, that influence external stakeholders’ perception of the reliability of the audit committee’s independence in Nigeria.