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This study was motivated by the spate of fraudulent financial practices which has resulted in series of financial scandals in recent times. The main aim of the study was to examine the effectiveness of audit committees in carrying out one of its core functions; the financial reporting processes. The study adopts a survey research design. 550 copies of questionnaire was distributed to a cross section of stakeholders, including shareholders, external auditors, internal auditors, company directors, bank executives, financial analysts, regulators and academics/researchers. The data was analyzed using non-parametric tests such as percentages, mean and standard deviation. The Kruskal Wallis test was also carried out to examine the difference in the perception among the stakeholder groups. The respondents agree that audit committees in Nigerian banks possess the capability to review the integrity of the bank’s financial statements (52%); review accounting policies of the bank and make changes where necessary (48%); review the accounting estimates and judgments made in the preparation of financial statements (45%); review whether the preparation of financial statements comply with the prevailing accounting standards (73%); and review the clarity, consistency and adequacy of disclosure in financial statements (65%). Based on these findings, the study concludes that the role of audit committees in financial reporting is fairly performed in Nigerian banks. All the statements with respect to the activities of audit committees in financial reporting function record a mean score greater than 3; and the overall average mean score of 3.40. The Kruskal Wallis test however gives values which are lower than the specified alpha level of .05. This implies that a significant statistical difference exists in the responses of the eight sample groups with respect to the role of audit committees in financial reporting processes.
