Effect of Audit Committee Independence on the Financial Performance of Insurance Firms in Kenya

Abstract

The aim of this study was to examine the effect of audit committee independence (ACI) on the financial performance of insurance firms in Kenya. The study analyzed data from the 55 insurance firms licensed by the Insurance Regularity Authority (IRA) in Kenya. ACI was operationalized by the number of independent directors serving in the boards of insurance firms operating in Kenya. Primary data was collected from a sample of 412 board directors, Chief Executive Officers (CEOs), Chief Finance Officers (CFOs), Audit Committee members (AUDIND) and Internal Auditors (INAUD) using a questionnaire instrument while secondary data was retrieved from audited financial reports of year 2017. Data was analyzed using descriptive and inferential statistics. Firm performance was measured by the two accounting-based measures Return on Assets (ROA) and Return on Equity (ROE). The findings from the regression analysis indicate that audit committee independence significantly and positively affects the financial performance of insurance firms in Kenya.

Keywords: {'name': 'Audit Committee Independence'}, {'name': 'Corporate Governance'}, {'name': 'Corporate Performance'}

Authors & affiliations

Hassan Bashir Ibrahim
Affiliation not supplied

Caren Ouma
Affiliation not supplied

Jeremiah O. Koshal
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

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