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From the result on table 7 above, shows that firm size has a significant positive moderating effect on firm performance measured by ROA with a t-statistic of 3.47 and a p-value of 0.000 (significant at 1% level) which is different from the result obtained in model I where in the direct relationship with ROA, block-holder ownership has an insignificant negative effect. Based on the decision rule, hypothesis four (Ho4) is rejected.

4.4 Discussion of Findings
Result from Table 6 above shows that block-holder ownership has an insignificant negative effect on firm performance with a coefficient of -0.0211, a t-statistic of-1.28 and a p-value of 0.224. This finding implies that if all other variables are held constant, a unit increase in the number of block-holder ownership of Nigerian quoted commercial banks leads to an insignificant reduction in firm performance. This finding disagrees with those of Hussain et al. (2018), Ahmed and Hadi (2017) and Citak (2011) who reported that block-holder ownership has a significant effect on firm performance.

Table 7 above shows that firm size has a significant positive moderating effect on block-holder ownership and firm performance of Nigerian quoted commercial banks with a coefficient of 0.0024, a t-statistic of 3.47 and a p-value of 0.000. This finding disagrees with that in Model I where the direct relationship of block-holder with firm performance revealed an insignificant effect.

6 Conclusion and Recommendations
Block-holder ownership in the Nigerian quoted commercial banks is a factor that reduces firm
performance due largely to the overbearing influence these set of owners could have on the
management because of the large size of their investment. Firm size is a significant moderating
variable when the relationship between block-holder ownership firm performance measured by return on asset. Based on the findings of the study, the following recommendations are made.
i) Block-holder ownership should not be encouraged in the Nigerian commercial banks as the more the block-holder, the less will the performance be leading the negative albeit insignificant effect on firm performance.
ii) Firm size should be employed when the effect of block-holder ownership on firm performance measured by return on asset is be moderated by a third variable as it has a significant moderating effect.
REFERENCES
Abel, E. E., & Okafor, F. O. (2010). Local corporate ownership and capital structure decisions in Nigeria: A developing country perspective. Corporate Governance, 10(3), 249-260.
Adamu, A., & Haruna, J. (2020). Ownership structures and firm performance in Nigeria: A canonical correlation analysis. Journal of Research in Emerging, 2(4), 23-32. https://doi.org/10.30585/jrems.v2i4.537.
Al-Amarneh, A. (2014). Corporate governance, ownership structure and bank performance in
Jordan. International Journal of Economics and Finance, 6(6), 192-202. URL: http://dx.doi.org/10.5539/ijef.v6n6p192.
Aribaba, F. O., Asenuga, B. S., & Egbewole, I. K. (2022). Ownership structure and financial performance of quoted building material firms in Nigeria. Fuoye Journal of Management, Innovation and Entrepreneurship, 1(1), 269-281.
Aymen, B. M. M. (2014). Impact of ownership structure on financial performance of banks: Case of Tunisia. Journal of Applied Finance and Banking, 4(2), 163-182.
Bansal, C. L. (2005). Corporate governance: Law practice and procedures with case studies. New Delhi. Taxmann Allied Service (P) Ltd.
Citak, L. (2011). The impact of ownership structure on company performance; A panel data analysis on Istanbul Stock Exchange Listed (ISE-100) Companies. Journal of Financial Markets Research, 1(2), 34-46.
Dakhlallh, M. M., Rashid, N., Amalina, W., Abdullah, W., & Dakhlallh, A. M. (2021). Ownership structure and firm performance: Evidence from Jordan. Journal of Contemporary Issues in Business and Government, 27(2), 79-90.
Edogbanya, A. &Kamardin H. (2016) company Reporting Transparency and firm Performance in Nigeria. Asian pacific Journal of advanced research 1(7), 1-12.
Etale, L. M., & Yalah, Y. (2022). Ownership structure and firm performance of listed consumer goods sector firms in Nigeria. International Journal of Development and Economic Sustainability 10(1), 1-12. https://doi.org/10.37745/ijdes.13.
Fazlzadeh, A., Hendi, A. T., &Mahboubi, K. (2011). The examination of the effect of ownership structure on firm performance in listed firms of Tehran stock exchange based on the type of the industry. International Journal of Business and Management, 6(3), 249-266.
Financial Reporting Council (2018). Nigerian Code of Corporate Governance.
Hansmann, H. (2000). The Ownership of Enterprise. The Belknap Press of Harvard University Press. England. (11-12).
Holderness, C. G. (2009). The myth of diffuse ownership in the United States. Review of Financial studies, 22(4), 1377- 1408. http://dx.doi.org/10.1093/rfs/hhm069.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the business: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 13(1), 305-360.
Jinadu, O., Uwuigbe, U., Uwuigbe, O. R., Asiriuwa, O., Eriabie, S., Opeyemi, A. & Osiregbemhe, I. S. (2018). Ownership structure and corporate performance of multinational banks: Evidence from Nigeria. Academy of Strategic Management Journal, 17(5), 1-11.
Kiruri, R. M. (2013). The effects of ownership structure on bank profitability in Kenya. European Journal of Management Sciences and Economics, 1(2), 116-127.
Khrawish, H. A. (2011). Determinants of commercial banks performance: Evidence from
Jordan. International Research Journal of Finance and Economics, 5(5), 19-45.
Ogabo, B., Ogar, G., & Nuipoko, T. (2021). Ownership structure and firm performance: the role of managerial and institutional ownership: Evidence from the UK. American Journal of Industrial and Business Management, 11(7), 1-16.
Ogega, D. O. (2014). The effect of ownership structure on the financial Performance of commercial banks in Kenya. A research project presented in partial fulfilment of the Requirement for award of Master of Science in finance, University of Nairobi.
Ohiani, D. L., Eniola, S. A., & Lateef, O. M. (2018). Effect of ownership structure on financial performance of listed financial firms in Nigeria. Journal of Accounting, Finance and Auditing Studies 4(3), 123-148.
Ozili, P. K & Uadiale, O. (2017). Ownership concentration and bank profitability. Future Business Journal, 3(1), 159–171.
Nguyen, H. S., Tu, T. T. T., Cuong, D. X., Ngoc, L. A., &Khanh, P. B. (2015). Impact of ownership structure and bank performance: An empirical test in Vietnamese banks. International Journal of Financial Research, 6(4), 123-133.
Thomas, T. K., & John, T. K. (2022). Ownership structure and corporate financial performance in emerging market: panel data analysis from listed firms in Kenya. African Journal of Education, Science and Technology, 7(1), 294-301.

Al-Amarneh (2014) investigates effect of ownership structure and corporate governance on bank performance (profitability and operating efficiency). The specific objectives of the study were to establish the effect of block-holder ownership and foreign ownership profitability. The study relied much on publicly available data for a sample of the thirteen listed banks in Jordan for the years 2000 to 2012. The study has shown that ownership concentration (block-holders) has a positive and significant effect of bank performance (profitability) while foreign ownership positively affects the bank performance (operating efficiency). The study recommends that good corporate governance standards are imperative to every bank and important to investors and other stakeholders.

2.4 Gap in Literature
The introduction of a third variable as a moderator of the relationship between shareholding structure represented by block-holders and financial performance measured by returns on assets is the widest gap this study fills in literature as a result of the dearth of previous studies that used a moderator.

3 Methodology
This study uses ex-post facto research design because the data are historical in nature having been generated through past corporate activities. The population of the study consist of all the ten (10) commercial banks quoted on the Nigerian Exchange Group (NGX) as of 31st December 2021. The sample size of this study comprises of all the ten (10) commercial banks quoted in Nigeria for 10 years from 2011- 2020 with respect to block-holder ownership and return on asset (ROA) using the Census sampling techniques. The data for this study were sourced from the financial statements of the 10 commercial banks obtainable from their websites. The data were analysed using Descriptive statistics, Correlation coefficients, Shapiro-Wilk normality test for the distribution pattern of the ser and Robust multiple regression to test the null hypotheses formulated. The panel regression will be used because of its BEST linear estimation characteristics.

Model Specification
The study adopts a bi-model approach for clarity. The dependent variable for the study is financial performance proxied by return on asset (ROA), while the independent variables which is ownership structure is represented by block-holder ownership. The specified linear equation for model I as used by Kiruri (2013) is expressed as follows:
ROA= f(BLKOWN)
Econometrically, the above equation is represented as:
ROAit =αo + α1BLKOWNit + μ it …………………………………… Model (I).
The second model which involves the moderating effect of firm size is linearly presented as follows:
ROAit =αo + α1BLKOWNit + α2Frmsz*BLKOWNit + μit ………………Model (II)
Where:
ROA= a predictor representing return on asset (a proxy for financial performance);
αo = a constant;
BLKOWN = a predictor representing block-holder ownership (a proxy for independent variable)
µ = Error term (Residual)
i-firm
t=period and
f = a Functional relationship.

Variable Measurement and Justification.
Table 1 below defines the variables of this study.

Variable Acronym Type Measurement Justification

Return on ROA Dependent Net profit divided by Adamu and Haruna (2020), Ahmed
Asset total assets of the banks et al. (2017) and Ogega (2014).

Block-holder BLKOWN Independent Percentage of shareholders Etale and Yalah (2022), Aribaba et
Ownership holding 5% and above al. (2022) and Kinuri (2013).
Controlling shares.
Firm Size FRMSZ Moderating Logarithm od total assets. Edogbanya and Kamardin (2016).
Source: Researcher’s compilation, 202
4 Results and Discussion
Descriptive Statistics
Table 2 below shows the descriptive statistics of the variables used in this study which summarises the distributional patters of the model.
Table 2 Descriptive Statistics
variable | Obs Mean Std. Dev. Min Max
ROA 100 0.0076 0.0376 -0.2424 0.1064
BLKOWN 100 0.4057 0.2418 0 0.8932
L_FRMSZ 100 9.0503 0.4148 8.1788 9.7916

Source: STATA 13 software output, 2023.
[
Table 2 above reveals that return on asset (ROA) has a low mean value of 0.008 and a standard deviation of o.038 with a negative minimum value of -0.2424 and a maximum of 0.1064. Block-holder ownership and foreign ownership have minimum values of zero (0) which means that some of the banks has no block owners and foreign owners at some points. The standard deviation which depicts the extent of dispersion show that ROA and BLKOWN were more widely dispersed having standard deviations which are greater than their means. However, firm size has a standard deviation of 0.4148 that is less than the mean (9.0503) which implies that firm size was less widely dispersed around its means.

Correlation Matrix
Table 3 below shows the results of the Pearson correlation conducted to determine the presence or otherwise of multicollinearity among the independent variables of the model. The decision rule is to accept the presence of multicollinearity is a pair or more of the independent variables correlate above 0.85 or reject the presence of multicollinearity if no pair of the independent variables correlate above 0.85.
Table 3 Pearson Correlation
ROA BLKOWN L_FRMSZ
ROA 1.0000
BLKOWN -0.1629 1.0000
L_FRMSZ 0.2906 -0.4781 1.0000
Source: STATA 13 software output, 2023.
Results from Table 3 above reveals that the independent variables did not correlate above 0.85 as the highest positive correlation of 0.2906 exist between firm size and ROA. From the decision rule, since no pair of the independent variables correlate above 0.85, there is no multicollinearity in the model specified. Multicollinearity has the potential of over estimating the coefficient of determination.
Residual Test for Normality Test
Table 4 below presents the results of the normality test for the model residuals using the Shapiro-Wilk test for normal data. The decision rule is to recognize that the residuals were normally distributed if the model has a p-value higher than the critical 0.05, or that the residuals were not normally distributed if the p-value of the model is lower than or equal to 0.05.
Table 4 Shapiro-Wilk Normality Test
Variable | Obs W V z Prob>z
residuals | 100 0.9638 2.993 2.432 0.0075
Source: STATA 13 software output, 2023.
Table 4. above indicates that the model has a p-value of 0.0078 that is lower than the critical value of 0.05 which implies based on the decision rule the residuals were not normally distributed. This result implies that the estimation of the models cannot be carried out with the aid of ordinary least square (OLS) regression as one of the basic assumption of OLS that requires normality of distribution has been violated. The models were estimated with robust regression which is most suitable for unusual data (abnormal distributed data) because robust regression is less susceptive to the behavior of such anomalies.

4.2.4 Heteroskedasticity Test
Table 5 below is the result of the heteroskedasticy test conducted with the aid of Breusch-Pagan / Cook-Weisberg test to determine the stability of the residual variance of the variables in the model. The decision rule is to accept the null hypothesis that residual has constant variance if the model has a p-value higher than 0.05 or reject the hypothesis if the p-value is lower than or equals to 0.05.
Table 5Heteroskedasticy Test

Breusch-Pagan / Cook-Weisberg test Variables: fitted values of roa
Ho: Constant variance
chi2(1) = 65.66
Prob > chi2 = 0.0852
Source: STATA 13 software output, 2023.
Table 5 above shows that the model has a p-value of 0.0852 which is higher than the critical value of 0.05 signifying that, based on the decision rule, the model residuals with constant variance and so the null hypothesis is accepted.

4.2.5 Regression Analysis (Model I)
Table 6 below presents the regression analysis of model I which captures effect of the independent variables on the dependent variables with the moderating variable in a direct relationship. The analysis was conducted with the aid of robust regression. The results from this model were used to test hypothesis 1.
Table 6 Regression Analysis of Model I
Robust
roa Coef. Std. Err. z P>|z| BLKOWN -0.0211 0.0174 -1.28 0.224 L_FRMSZ 0.0257 0.0103 2.52 0.002 _cons -0.0207 0.0156 -1.37 0.215

R-sqd overall = 0.3318
Wald chi2(4) = 322.63
Prob > chi2 = 0.000
Source: STATA 13 software output, 2023.
Table 6 above reveals that the model has a coefficient of determination of 33 which means that the independent variable and the moderating variable namely BLKOWN and FRMSZ jointly have approximately 33% effect on the firm performance of the sampled commercial banks in Nigeria from 2011-2020. The model also has a Wald chi2 and p-value of 322.63 and 0.000 indicating that it is fit and results obtained were not by chance

Regression Analysis (Model II)
The regression analysis which tests both the direct relationship without moderation and the indirect relationships between the independent variables and the dependent variable moderated by firm size using the robust regression method. The result from the indirect moderated relationship was used to test hypothesis 2.

Table 7 Regression Analysis (Model II) Robust

roa | Coef. Std. Err. z P>|z|

BLKOWN -0.2254 0.2852 -0.79 0.429
L_FRMSZ_BLKOWN 0.0024 0.0022 3.47 0.000
_cons 0.0093 0.0058 1.60 0.111
R-sqd overall 0.2582
Wald chi2 = 601.21
Prob chi2 = 0.0000
Source: STATA 13 software output, 2023.
Table 7 above shows that the model has an R-squared overall which represents the coefficient of determination of 0.2582 which means that the combine effect of the BLKOWN both in its free-state and moderated form on firm performance of Nigerian quoted commercial banks is approximately 26%. The model displays a Wald chi2 of 601.21 and prob chi2 of 0.000 indicating that the model is fit.

5 Test of Hypotheses
T
he decision rule here is that if the calculated p-value is lower than or equals to the critical value of 0.05, the null hypothesis formulated should be rejected or if the calculated p-value is higher than the critical p-value of 0.05, the hypothesis should be accepted.

Ho1: There is no significance effect between block-holder ownership and firm performance
of quoted commercial banks in Nigeria.
From the result on table 6 above, block-holder ownership has an insignificant negative (-1.28) effect on firm performance of Nigerian quoted commercial banks measured by return on asset (ROA) with a p-value of 0,224 which is higher than the critical p-value of 0.05. Based on the decision rule, the null hypothesis one (Ho1) is accepted and the alternate hypothesis rejected.

Ho2: Firm Size has no significant moderating effect on block-holder ownership and firm performance of quoted commercial banks in Nigeria.

Moseswada1@gmail.com and adejoh17@yahoo.com.

Abstract

Many shareholding structures studies in developed countries have established links between corporate governance and firm performance. However, in developing countries like Nigeria, very little attention has been given to complete disclosure of shareholding structure in relation to firm performance. It is against this background that this study examines the moderating effect of firm size on the relationship between shareholding structure and firm performance. The specific objectives of the study were to determine the direct effect of block-holder ownership on return on assets, and to find the moderating effect firm size on the relationship between block-holder ownership and return on assets. The multiple regression analysis was carried out with aid of robust panel regression using two-models. The findings model I showed that block-holder ownership has an insignificant negative effect on firm performance, while, Model II showed that firm size significantly moderates the relationship between block-holder ownership and firm performance. The study recommends reduced block-holder ownership for improved firm performance among Nigerian quoted commercial banks.
Keywords: Block-shareholding, Financial Performance, Firm Size, Return on Assets, Moderating
Variable.

1 Introduction

Ownership structure is an aspect of corporate governance that is concerned with how the basic units (shares) of an entity are owned and it is extensively seen to be determined by a country’s specific corporate governance characteristics. A firm’s ownership structure is composed of investors, financial institutions, mutual funds, international firms, block-holders, family members and managers. Holderness (2009) points out that ownership structure is one of the most important factors in shaping the corporate governance system of any country. According to him, it determines the nature of the agency problem, which is whether the dominant conflict is between managers and shareholders, or between controlling and minority shareholders, adding that the degree of ownership concentration in a firm determines how power is distributed between its shareholders and managers. When ownership is dispersed, shareholding control tends to be weak because, a small shareholder is unlikely to be interested in monitoring because a large portion on his smaller benefits will go to settle the cost of monitoring (Ohiani, 2018).

The financial performance of many organizations has been largely linked to their ownership structure over time as it provides funding through owner’s equity. The Nigerian Code of Corporate Governance (2018) section 23.1.5 requires that the board of directors must ensure that all shareholders understand the ownership structure of the company, and support them in this by making available, current information on the ultimate beneficial owners of the major shareholdings or any shareholders owning, controlling or influencing five percent (5%) or more of the Company’s shares. Normally, every business organization has the responsibility of making returns for the owners. This is important since the ability of a firm to make returns in the competitive market determines to a large extend its ability to survive in the future. A bank’s ownership structure influences its performance because differences in ownership type: concentration, diversity and resource endowments among shareholders determine their incentives and ability to monitor bank managers.

In Nigeria, the 2000–2010 banking reform led to bank mergers, acquisition and consolidation activities intended to strengthen the banking sector and these activities led to significant changes in bank ownership to permit various ownership systems including wealthy families and rich individuals, institutional, managerial or insider ownership and foreign interests in an attempt to reduce government’s control of banks. This liberal policy consequently resulted in a greater number of individual shareholders with large direct equity holding in Nigerian banks. Moreover, large direct equity ownership by controlling shareholders can have serious consequences for bank profitability depending on whether controlling shareholders have private control benefits or whether there are shared controls benefits that accrue to both controlling and non-controlling owners and this effect also depend on the levels of ownership concentration in Nigerian banks (Ozili et al, 2017). Ownerships should be expanded to include directors, managers, employees, and even customers and suppliers.

Block-holder ownership also called concentrated ownership refers to shareholding with an exceptionally large amount or value of stock. Even though there was no specific definition of how many shares constitute a block, most people using the term refer to holding more than 5% of shares. A major aspect of ownership structure is related to how concentrated the company’s shares are. A company’s ownership is said to be concentrated if a high percentage of shares is in the possession of relatively small number of owners (Citak, 2011) and it is measured a percentage of equity held by block-holders as investors in the firm. The block-holder ownership is said to be concentrated if the majority of the stocks are owned by the minority of individuals or groups, so that the stockholders have more dominant stocks than the others. The important element of stock block ownership by external party is the stronger monitoring over the manager or insider so as to reduce the agency problem between management and stockholders.

The connection between ownership structure and performance has been the subject of an important and ongoing concern in the corporate finance literature as it is the key in determining control of firms. From available literature reviewed, there is no general agreement on the exact effect of ownership structure on business performance. Several Scholars including Ohiani et al, (2018) and Ogega (2014) maintain that ownership structure has a significant effect on firm performance. On the other hand, Aymen (2014) and Falzadal et al, (2011) reported that there is no significant effect of ownership structure on the performance of firms. This lack of consensus among scholars and the paucity of studies conducted that included a moderating variable on the effect of shareholding structure of financial performance necessitate this study.

The main objective of this study is to examine the moderating effect of firm size on shareholding structure and firm performance of the commercial banks listed in Nigeria, while the specific objectives are to:
i. examine effect of block-holder ownership on financial performance of quoted commercial banks Nigerian;
ii. explore the moderating effect of firm size on block-holder ownership and financial performance of quoted commercial banks Nigerian;
In order to achieve the stated objectives of this study, the following null hypotheses were developed:
i. Block-holder ownership has no significant effect on financial performance of quoted commercial banks in Nigeria
ii. There is no moderating effect of firm size on block holder ownership and financial performance of quoted commercial banks in Nigeria
2 Conceptual Review of the Study
The conceptual framework of this study shall be made of the independent variable (Ownership structure) represented by block-holder ownership, while, the dependent variable (financial performance) was proxied by return on asset (ROA).

Concept of Shareholding Structure
Abel and Okafor (2010) define shareholding structure as the percentage of share held by managers (managerial ownership), institutions (institutional ownership), government (state ownership), foreign investors (foreign ownership) and family (family ownership). Jensen et al, (1976), define ownership structure as the distribution of equity with regards to votes and capital as well as the identity of the equity owners. Bansal (2005) states that ownership structure as the committee of investors and shareholders (proprietors) is made up of individual peoples, groups and institutions who have different goals, interests, investment horizons and capabilities in a business.

The concept of ownership structure has been be defined by Kiruri (2013) along two perspectives, namely; ownership concentration which is referred to as the share of the largest owner and is influenced by absolute risk and monitoring costs and secondly, ownership mix while the latter is related to the identity of the major shareholder. Ownership structure is like the hard core of corporate governance composed of a firm’s owners who are those persons who share two formal rights: the right to control the firm and the right to appropriate the firm’s profits, or residual earnings which in theory, could be separated and held by different classes of persons Hansmann (2000).

Concept of Block-holder Ownership
Block-holder ownership also known as concentrated ownership is shareholding with an exceptionally large amount or value of stock. Block-holders is the aggregate fractional holdings of entities who hold more than five per cent of the firm’s shares (Aribaba et al. 2022). Large block-holders who have a strong incentive to closely monitor a firm, may acquire seats on the board, which enhances their ability to monitor effectively. Block-holder ownership refers to an ownership fraction or stake in a firm that is held by shareholders with the controlling interest or with large stake which affords the shareholders the motivation and ability to monitor and control management decisions. Block-holding shareholders use their large stake in reducing conflicts between managers and the organization by being more proactive in monitoring and protecting their investments. Ogabo (2021) claims that block-holders have a lot of funds to invest and exhibit strong fiduciary responsibilities, so they are eager to see their firms perform well. Also, they want to reduce free riders so they closely monitor since the possibility of exit could be expensive. The block-holders achieve concentrated control when they hold a large interest in the company and heavy voting rights, and so, they become involved with the operating decisions of the firm. For this study, block-holder ownership refers to the shareholders who hold controlling interest as a result of the large share they hold.

Concept of Financial Performance
Financial performance measures how well a firm uses its resources to make a profit and it is a vital tool to several stakeholders in a firm. Ogega (2014) points out that there are three major indicators used to measure financial performance of commercial banks. The first one is Return on Assets (ROA) which is a ratio of income to the total assets of the bank. ROA indicates the ability of the bank to realize return on its sources of fund to generate profits. Secondly, Return on Equity (ROE) is the net profit divided by shareholders’ equity and is expressed in percent. It indicates how efficient the bank is utilizing funds invested by the shareholder. Thirdly, Net Interest Margin (NIM) indicates the difference between interest income and interest expense as a percentage of total assets. which reflects the gap between the interest income the bank receives on loans and securities and interest cost of its borrowed funds (Khrawish, 2011).

2.2 Theoretical Review
This study is anchored on the agency theory propounded by Jensen and Meckling, (1976), which is based on the idea of separation of ownership (principal) and management (agent). This is the theory of anchorage because ownership structure and its effect on performance as studied in this work is the basis for separation of ownership and control by management which is the problem agency theory was formulated to solve. The theory holds that in the presence of information asymmetry, the agent is likely to pursue interest that may conflict with that of the principal. Since managers are said to favour perks of office and power even at the expense of shareholders’ interest, they are likely to pursue interests that may hurt their principals (the shareholders). The theory therefore suggests an optimal debt level that would arise as a result of agency cost. The theorists suggested a situation whereby the interest of the managers in the firm should increase in order to be aligning with the owners. The debt level should also be motivated to control managers’ tendency for extra consumption. Free cash flow in a firm can be controlled by increasing the managers’ stake in the firms or debt in the capital structure thereby reducing the amount of free cash available to managers. Agency theory is a theory that has been applied to many fields in the social and management sciences: politics, economics, sociology, management, marketing, accounting and administration. The agency theory is a neoclassical economic theory and is usually the starting point for any debate on the corporate governance.
2.3 Empirical Review
Etale and Yalah (2022) investigated the ownership structure and financial performance of listed consumer goods firms in Nigeria for the period of 2011-2020. The specific objectives were to examine the effect of controlling (concentrated) ownership and non-controlling (dispersed) ownership on return on asset. The data were gathered from the published financial statements of consumer goods firms. The panel data were analyzed through the descriptive statistics; correlation analysis, panel regression and fixed and random effect regression. The result revealed that controlling ownership has positive and non-statistically significant with financial performance, while non-controlling ownership has positive and a significant relationship with financial performance of listed consumer goods firms in Nigeria. The study recommended that firms listed under the sector should imbibe the corporate governance long run strategies to increase the organizational growth.

Aribaba et al. (2022) evaluated the effect of ownership structure on financial performance of quoted
building material firms in Nigeria. The specific objectives of the study were to establish the effect of supervisory ownership, institutional ownership and ownership concentration on financial performance. The ex-post-facto type of qualitative research design was used. Four (4) firms were selected using purposive and random sampling techniques. The data were from secondary sources via annual published financial reports of building material firms for 2011 to 2020. The method of data analysis used were descriptive and ordinary least square regression statistics to measure the inference of the independent variables on the financial performance of the firms. The unit root stationarity test was used to measure the normality of the data. The study reveals that supervisory ownership showed a positive and significant effect on the financial performance, institutional ownership showed a positive and significant effect on the financial performance, while ownership concentration showed negative but significant effect on the financial. The study recommends that the Securities and Exchange Commission encourage more potential managers and institutional shareholders as both managers and institutional shareholders improve the financial performance of quoted building material firms in Nigeria.

Ogabo et al. (2021) examined the impact of ownership structure on firm performance of the Uni Kingdom’s FTSE 350 companies from the 2008-2018 fiscal years. The specific objectives were to explore the impact of managerial and institutional ownership on return on asset, return on equity, and Tobin’s Q as measures of performance. A panel data set of 48 companies with 432 observations was analysed using descriptive statistics, correlation matrix, and regression analysis. The results revealed that there is a significant positive impact of managerial ownership on firm performance without any entrenchment effect at managerial ownership above 5%. The regression results showed that the control variables of the percentage of independent directors on the board increase firms’ performance, while the percentage of women on the board as a control variable decreases firms’ performance. The study offers no recommendations.

Adamu and Haruna (2020) examined the relationship between ownership structure and performance of listed non-financial firms in Nigeria. The specific objectives of the study is to determine the relationship between managerial ownership, ownership concentration, foreign ownership, institutional ownership and Tobin q, return on assets, return on equities, and earnings per shares. Secondary data collected from forty (40) sampled firms. The data were analyzed using canonical correlation and the findings showed that managerial and foreign ownerships are the dominant ownership structures while Tobin q, EPS, and ROA are the dominant performance measures. The study also found that ownership concentration, foreign ownership, and institutional ownership are positively correlated with firm performance, while managerial ownership is negatively correlated with firm performance. The study recommended that listed non-financial firms should encourage foreign investments in their firms and rewards performing managers with shares in the firms.

Dakhlallh et al. (2019) attempt provide empirical evidence concerning the relationship between the ownership structure and firm performance of the shareholding companies listed on the Amman Stock Exchange (ASE). The specific objectives of the study were to investigate the effect of institutional and block shareholders ownership on Tobin’s q. Firm performance was measured by using Tobin’s Q (TQ). This study also used a moderating variable which is board independence. The panel data were analysed by ordinary lest square multiple regression for a sample of 180 companies listed on Amman Stock Exchange (ASE) for the period from 2009 to 2017. The findings show that the ownership structure mechanisms have a significant influence on firm performance measure by (TQ). So, institutional ownership shows a significant positive relationship with (TQ), however, the findings show block holders ownership have a significant negative relationship with (TQ). On another hand, the moderating effect of board independence has a significant positive effect on the relationship between block holders ownership and (TQ) and has a significant negative on the relationship between institutional ownership and (TQ). They recommend further researches that should examine the moderating or mediating influence of other variables on the relation between chosen variables and firm performance, such as audit committee mechanisms and that future researchers can also use different performance measure, such as ROA, ROE and market share.

Jinadu et al, (2018) investigate whether a significant relationship exists between ownership concentration and corporate performance of Nigerian multinational banks. The specific objectives of the study were to examine the impact of ownership concentration, foreign ownership and domestic ownership on corporate performance. The corporate annual reports for the periods 2010-2014 were utilised as the main source of secondary data. Interesting the research hypotheses, the study adopted the use of panel least square regression method to analyse the data collected from annual reports of the Nigerian multinational banks. Also, the study made use of correlational research design for testing the expected relationship between the variables. Findings revealed a significant negative relationship between ownership concentration and corporate performance of Nigerian multinational banks. In addition, an insignificant positive impact of foreign ownership on corporate performance exists. They also found a significant negative impact of domestic ownership on corporate performance. The study recommended that Nigerian multinational banks should reduce ownership concentration and domestic ownership in order to increase the level of corporate performance. In addition, foreign ownership should be encouraged as a result of its technical expertise and financial support that improve corporate performance.

Nguyen et al, (2015) investigate the impacts of ownership structure on bank performance in Vietnamese banking system using the data collected from the whole 44 banks in the banking system in Vietnam from 2010-2012. The specific objectives of the study were to ascertain the impacts of capital concentration and private ownership on bank profitability. Results show that capital concentration and private ownership have positive impact on bank profitability. Besides, the research results are also consistent with the previous researches (Nguyen, Tran & Pham, 2014) on the positive correlation of corporate governance and bank performance in Vietnam. The findings of this study are also relevant with the previous researches in Kenya, China, Malaysia (Wen, 2010, Rokwaro, 2013). From these findings, it was recommended that banks should encourage the large shareholders participation on the Board of Director to reduce the conflict of interest and the general agency problem in banks and promote private ownership to increase bank profitability.

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Test of Hypotheses

The decision rule here is that if the calculated p-value is lower than or equals to the critical value of 0.05, the null hypothesis formulated should be rejected or if the calculated p-value is higher than the critical p-value of 0.05, the hypothesis should be accepted.
Ho1 Audit Committee Diligence has no significant effect on Financial Performance of Industrial Goods Companies in Nigeria.
The decision rule is to reject the null hypothesis if the p. value is less than 0.05 or accept the null hypothesis if the p. value is greater than 0.05.
Table 9 Results of Analysis
Variable Coeff. Std. Err t. value p. value
Audit Committee
Diligence (ACD) 0.0462 0.0265 1.74 0.083
Table 9 above reveals that Audit Committee Diligence (ACD) has an insignificant (0.083) positive (1.74) effect on Return on Asset (ROA) which measures Financial Performance of Industrial Goods Companies in Nigeria from 2011-2020. Based on the decision rule, the null hypothesis One (Ho1) is accepted.

Ho2 Audit Committee Financial Expertise does not have significant effect on Financial Performance of Industrial Goods Companies in Nigeria.
The decision rule is to reject the null hypothesis if the p. value is less than 0.05 or accept the null hypothesis if the p. value is greater than 0.05.
Table 10 Results of Analysis
Variable Coeff. Std. Err t. value p. value
Audit Committee
Financial Expertise (ACD) -0.0052 0.0044 -1.17 0.212
Source: Table 4.5 above.
Table 4.3.2 above indicates that Audit Committee Financial Expertise (ACFE) has an insignificant (0.212) negative (1.17) effect on Return on Asset (ROA) which measures Financial Performance of Industrial Goods Companies in Nigeria from 2011-2020. Based on the decision rule, the null hypothesis Two (Ho2) is accepted.
Ho3 Audit Committee Gender Diversity display no significant effect on Financial Performance of Industrial Goods Companies in Nigeria.
The decision rule is to reject the null hypothesis if the p. value is less than 0.05 or accept the null hypothesis if the p. value is greater than 0.05.
Table 11 Results of Analysis
Variable Coeff. Std. Err t. value p. value
Audit Committee
Gender Diversity (ACD) 0.0118 0.0047 2.51 0.011
Source: Table 4.5 above.
Table 11 above also reveals that Audit Committee Gender Diversity (ACGD) has a significant (0.011) positive (2.51) effect on Return on Asset (ROA) which measures Financial Performance of Industrial Goods Companies in Nigeria from 2011-2020. Based on the decision rule, the null hypothesis Three (Ho3) is rejected.

Discussion of Findings
Result from Table 6 above shows that Audit Committee Diligence (ACD) has an insignificant positive effect on Financial Performance of Industrial Goods Companies in Nigeria measured by Return on Asset (ROA) from 2011-2020 with a coefficient of 0.0462, a t-value of 1.74 and a p. value of 0.083 (insignificant at 5% level), such that, a unit increase in the number of meetings held by the Audit Committee members brings about an insignificant increase in their Financial Performance.
The table also shows that Audit Committee Financial Expertise (ACFE) has an insignificant negative effect on Financial Performance of Industrial Goods Companies in Nigeria measured by Return on Asset (ROA) from 2011-2020 with a coefficient of 0.0052, a t-value of -1.17 and a p. value of 0.212 (insignificant at all levels), such that, a unit increase in the number of members of Audit Committee with sound knowledge of accounting and finance brings about an insignificant reduction in their Financial Performance.
Table 6 above reveals that Audit Committee Gender Diversity (ACGD) has a significant positive effect on Financial Performance of Industrial Goods Companies in Nigeria measured by Return on Asset (ROA) from 2011-2020 with a coefficient of 0.0118, a t-value of 2.51 and a p. value of 0.011 (significant at 5% level), such that, a unit increase in the number of female members of Audit Committee engenders a significant increase in their Financial Performance.
Big 4 is found to strengthen the positive relationship between audit committee characteristics and financial performance. The result shows that big4 strengthens the positive relationship between audit committee gender diversity and financial performance. Big 4 is also found to moderate the relationship between audit committee characteristics and financial performance.

5. Conclusion and Recommendations
   Audit Committee Diligence has shown to be a weak factor in terms of its effect on financial performance of the industrial goods companies that in Nigeria as it has positive but insignificant effect on ROA. Audit Committee Financial Expertise slightly diminish financial performance largely because of the overriding role the experts may allocate to themselves and which they may not have enough time to handle. The more female members are appointed to the Audit Committees of Industrial goods companies, the better as the presence engenders significant financial performance. Based on the findings of the study, the following recommendations are made.
   i. Management of Industrial Goods companies in Nigeria should not regard number of times audit committee as a useful factor in improving their financial performance since Audit Committee Diligence has an insignificant but positive effect on Financial Performance.
   ii. The inclusion of members with sound finance and accounting knowledge should be at the minimum because their presence have negative although insignificant effect on Financial Performance.
   iii. Industrial Goods companies should ensure that female members constitute al least two-third of the committee since add value to committee proceedings and exert significant positive effect on financial performance.

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EMMANUEL Huleji Dauda and EDOGBANYA,Adejoh Ph.D.
daudupress@gmail.com and adejoh17@yahoo.com.

Abstract
The primary role of the audit committee is to supervise the internal process of preparing financial reports and ensure that the conflict of interest between management and shareholders is minimized by instituting internal control mechanisms so as to enhance overall performance of the firms. A function that is critical for the survival of every business. Against this background, this study examines the Moderating effect of Big4 on Audit Committee and Financial Performance of Quoted Nigerian Industrial Goods Companies in Nigeria from 2011-2020. Audit Committee was proxied by Audit Committee Diligence, Audit Committee Financial Expertise, and Audit Committee Gender Diversity.

Financial Performance was measured by Return on Asset. The population and the sample size are the same Twenty-One Industrial Goods Companies Quoted on the Nigerian Exchange as at 31st December, 2020. The data were sourced from the financial statements of the companies. Descriptive statistics, Pearson Correlation, Shapiro-Wilk data normality test and Heteroskedasticy test were the diagnostic tests conducted. The analysis was by Pooled Ordinary Least Square multiple regression method. It was recommended that there is significant relationship between audit committee characteristics and financial performances, companies should ensures expertise are seriously considered in formation of audit committee of any corporation.
Keywords: Audit Committee, Financial Performance, Return on Assets, Moderating Variable.

Introduction

Audit committee is a central element of one of such reforms engendered by corporate governance practice that can improve the quality of financial reporting through an open and candid communication and a good working relationship with a company’s board of directors, internal auditors and external auditors (Mustafa, 2012). The existence of an appropriately constituted audit committee is now a necessity for all listed companies in Nigeria. According to CAMA (2020) Section 359 (4) as amended,(2020) the make-up of the statutory audit committee shall consist of an equal number of directors and representatives of the shareholders of the company subject to a maximum number of six members (Eriabie & Izedonmi, 2016). For the purpose of this study, audit committee referred to is the statutory audit committee.

Audit committee is an important corporate governance mechanism designed to ensure that a company produces relevant, adequate and credible information that investors as well as independent observers can use to assess company performance with high reliability (Bansal & Sharma, 2016).

The Audit committee’s establishment comes as a solution to the corporate scandal that was rocking numerous companies across the globe. For instance, in Nigeria, Chief Executives of Oceanic, Afribank and Intercontinental Banks were found guilty of high level fraud running into billions of Naira and money laundering cases while, the CEO of Cadbury Plc and Lever Brothers (now Unilever Plc), an Anglo-Dutch company were accused of doctoring their financial statements (Afolabi & Amupitan, 2015; Chukwunedu et al. 2013). These crises arose despite the fact that their books of accounts were certified to be true and fair representation of their financial position by external auditors.

The most important roles of the audit committee include overseeing the financial reporting process and monitoring the management since management intends to manipulate figures for their own interest (Al-Mamun et al., 2014). The Audit Committee could be either Board audit committee or statutory audit committee electable only by the Annual General Meetings (AGM). Audit committee is a central element of one of such reforms engendered by corporate governance practice that can improve the Profitability by ensuring strict internal control and fostering a good working relationship with a company’s board of directors, internal auditors and external auditors (Mustafa, 2012).

The existence of an appropriately constituted audit committee is now a necessity for all listed companies in Nigeria. According to CAMA (2004) as amended in 2020, Section 359 (4) the make-up of the statutory audit committee shall consist of an equal number of directors and representatives of the shareholders of the company subject to a maximum number of six members (Eriabie & Izedonmi, 2016). For the purpose of this study, audit committee referred to is the statutory audit committee.

Audit Committee Diligence refers to the level of commitment exercised by the members of the audit committee can be measured by the number of meeting they hold in an accounting year. The Nigerian Code of Corporate Governance (2018) states in Section 11.4.5 that the committee should meet at least once every quarter and in Section 11.4.8 added that at least, once in a year, the committee should hold a discussion with the head of the internal audit function and the external auditors without the presence of management, to facilitate an exchange of views and concerns that may not be appropriate for open discussion. Common sense dictates that the more regularly the members of an audit committee meet, the better for the company as issues demanding their attention would not pile up or remain unattended to for a long time thereby assisting the internal control system as a whole to function effective, thereby remain a factor that affects financial performance.

Audit Committee Financial Expertise refers to the proportion of the committee members with a good knowledge of accounting and finance. Financial experts inclusion in audit committee was first recognized under Section 359 (3) and (4) of CAMA 2004 (as amended) and was further reflected in the SEC code of 2011 mandating that at least one of the audit committee members should have sound knowledge in financial and accounting matters (Osemene & Fakile, 2018). Section 11.4.2 of the Nigerian Code of Corporate Governance (2018) puts it succinctly clear that all members of the audit committee should be financially literate and should be able to read and understand financial statements and that at least one member of the committee should be a financial expert in accounting and financial management and be able to interpret financial statements.

Audit Committee Gender Diversity refers to the differences in the number of male and female members of the audit committee of companies. There has been a steady demand for female representation on corporate boards and hence audit committees since the Benjing declaration in 1995 where it was argued that women have not been given their rightful place in corporate governance (Omotoye et al., 2021). This call finds support in the Resource dependency theory which aligns with the view that inclusion of women on the board would afford the firm different ideas, views and experience. Audit committee gender diversity which is concerned with the presence of women on audit committee has the potential of influencing financial performance since it has been argued according to Wakaba (2014), that women are more likely to be through and vigilant in their statutory responsibilities and therefore detect misstatements and fraud easily.

The main objective of this study will be to examine the Moderating effect of Audit Firm Type on Audit Committee and Financial Performance of quoted Industrial Goods Companies in Nigeria, while the specific objectives are to:

I. Establish the effect of Audit Committee Diligence and Financial Performance of Quoted Industrial Goods Companies in Nigeria.
II. Determine the effect of Audit Committee Financial Expertise on Financial Performance of Quoted Industrial Goods Companies in Nigeria.

I. Investigate the Audit Committee Gender Diversity on Financial Performance of Quoted Industrial Goods Companies in Nigeria.
In order to achieve the stated objectives of this study, the following null hypotheses were developed:
I. Audit Committee Diligence does not have significant effect on Financial Performance of Industrial Goods Companies in Nigeria;
II. Audit Committee Financial Expertise has no significant effect on Financial Performance of Industrial Goods Companies in Nigeria;
III. Audit Committee Gender Diversity shows no significant effect on Financial Performance of Industrial Goods Companies in Nigeria;
2 Conceptual Review of the Study
The conceptual framework of this study is made up of the independent variable (Audit Committee) proxied by Audit Committee Diligence (ACD), Audit Committee Financial Expertise (ACFE), and Audit Committee Gender Diversity (ACGD), the dependent variable Financial Performance measured by Return on Asset (ROA).

Concept Audit Committee
Qeshta et al. (2021) refer to an Audit Committees as a supervisory body on behalf of all stakeholders that is mandated to ensure financial information’s trustworthiness by creating a management-free environment where external auditors can certify the company’s accounts and financial statements, adding that an audit committee must have the competence and be empowered to perform its role as a catalyst for implementing, observing and maintaining acceptable corporate governance practices to benefit all stakeholders and management. Olayinka (2019) reports that Audit Committees establish checks and balances in the internal control system through the association of internal auditors and external auditors to ensure that the management comply with the laid down rules. Salloum et al. (2014) maintain that Audit Committee is to assist the board of directors in effective management monitoring with the aim of protecting the interest of the shareholders.

Samoei and Rono (2016) note that Audit committees have a significant impact on the financial performance of a firm because they act as watchdogs and can prevent fraudulent financial reporting by ensuring that the financial statement reflects the actual state of affairs on the ground.

Audit committees play an important role in supervising and monitoring the management of the company in order to protect the interests of the owners (Oroud, 2019). The audit committee, in the opinion of Arshad et al. (2011) is a critical link between a firm’s financial reporting function and its external shareholders, noting that when this link is compromised, it can lead to even larger corporate governance failures. Olayinka (2019) also affirms that firms with high-quality audit committees are less likely to have internal control weaknesses which will adversely affect financial performance than firms with low-quality audit committees. For the purpose of this study, Audit Committee characteristics are Audit Committee Size, Audit Committee Independence, Audit Committee Financial Expertise and Audit Committee Gender Diversity

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