Audit Committee Effectiveness and the Incidence of Organisational Malpractice in selected Nigeria Deposit Money Banks

This study investigated the effect of audit committee effectiveness on organisational malpractice in Nigerian deposit money banks from 2019-2023. Using ex-post facto design and panel data from ten banks, audit committee effectiveness was measured by Committee Independence (CID), Frequency of Meetings (FMT), and Expertise of Members (EMB). Malpractice was indexed via Financial Misconduct (FCI), Procedural Violations (PVI), and Regulatory Breaches (RBI). Regression results showed a significant model (R² = 0.417, p = 0.000). CID had a significant negative effect on overall malpractice (β = -0.342, p = 0.002), FMT on procedural violations (β = -0.213, p = 0.023), and EMB on regulatory breaches (β = -0.273, p = 0.009). The study concludes that substantive audit committee effectiveness, characterized by independence, activity, and expertise, is a critical deterrent to organisational malpractice. It recommends that regulators and bank boards move beyond structural compliance to enforce and cultivate these substantive attributes for stronger governance.