Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between audit committee effectiveness and firm value of listed companies has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Edo State where operating conditions differ markedly from more developed markets.

Edo State presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While audit committee effectiveness is widely discussed in policy and industry circles, empirical evidence on its actual effect on firm value of listed companies within Edo State remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to audit committee effectiveness are helping or hindering firm value of listed companies — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Audit Committee Effectiveness on firm value of listed companies in Edo State.
2. To assess the extent to which audit committee effectiveness influences firm value of listed companies within the study area.
3. To identify the challenges associated with audit committee effectiveness in relation to firm value of listed companies.
4. To recommend strategies for optimizing audit committee effectiveness in order to improve firm value of listed companies.

1.4 Research Questions

1. What is the effect of audit committee effectiveness on firm value of listed companies in Edo State?
2. To what extent does audit committee effectiveness influence firm value of listed companies within the study area?
3. What challenges are associated with audit committee effectiveness in relation to firm value of listed companies?
4. What strategies can be adopted to optimize audit committee effectiveness in order to improve firm value of listed companies?

1.5 Significance of the Study

Beyond its academic contribution to the field of accounting, this study has practical value for management teams within Edo State seeking to understand how audit committee effectiveness translates into measurable outcomes around firm value of listed companies. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

The study is limited to an examination of Audit Committee Effectiveness and its relationship with firm value of listed companies within the context of Edo State. It reflects a clearly defined scope of analysis and relies on data and perspectives available within that scope; generalizing the findings beyond this specific context should therefore be done with appropriate caution.