Audit Committees as Accountability Mechanisms in Weak Institutional Contexts: Investment Analysts’ Perspectives

The nature, practice and effectiveness of audit committees, as accountability mechanisms are not well understood. Most especially, the independence of this crucial governance division is questionable, in weak institutional environments. Exploring the Nigerian context, and using a multi-method qualitative research approach, we examine firms’ audit committees as accountability mechanisms, in terms of their influence on investment analysts’ decision making process. We contribute to accountability theory and the literature on corporate governance by showing that the ‘independence’ of audit committee members is an ‘a posteriori’ rather than an ‘a priori’ accountability verification. Our findings suggest the exercise of caution in treating audit committees’ reports or the independence of audit committee members as a governance monitoring mechanism, in weak institutional contexts, as this might be misleading.