http://www.ijssit.com © Maina, Olouch 684 EFFECT OF CORPORATE AUDIT COMMITTEE CHARACTERISTICS ON FINANCIAL PERFORMANCE OF MANUFACTURING FIRMS IN KENYA 1* Lucy K. Maina kareralucy@gmail.com 2** Dr. Oluoch Oluoch oluochjoluoch@gmail.com 1, 2 Jomo Kenyatta University Of Agriculture And Technology, P.O Box 62000-00200 Nairobi, Kenya ABSTRACT The goal of this research was to establish the effect of corporate audit committee characteristics on financial performance of manufacturing firms in Kenya. The specific goals guiding this research were: To determine the effect of audit committee composition and frequency of meetings on financial performance of manufacturing firms in Kenya. This research adopted the Agency, institutional, and stewardship theories. The research design for the study was descriptive research design. This study focused on 766 manufacturing firms in Kenya for a period of 5 years, 2013-2017. The study used Krejcie and Morgan’s sampling technique to calculate the sample size. Both secondary and primary data was gathered for the research. Primary information was accumulated by means of a structured questionnaire. On the other hand, secondary information was gathered from the financial reports. Content validity was adopted to establish whether the research instruments are able to give answers to the study questions. The study utilized Cronbach’s alpha formula for reliability testing, with value of 0.7. Inferential and descriptive statistics were utilized to analyse the data. Multiple linear regression analysis was used to show the effect of audit committee composition and frequency of meetings on financial performance of manufacturing firms in Kenya. The hypotheses were tested using multiple linear regression and correlation at 95% confidence level of both the dependent and independent variable and also between variables in the study. The study revealed that large audit committee tends to lose focus and becomes less participative than those with smaller size, regular holding of audit committee meetings helped in ensuring that organizational finance department consistently comply with accounting guidelines and other accounting actions and that most of the firms factored in the third gender rule while constituting the audit committees which led to improved effectiveness on the firm’s financial management process. The study concludes that there exists a significant relationship between audit committee composition and audit committee meetings frequency and firms Financial Performance. The study recommends that Manufacturing firms should ensure Audit committees should periodically conduct an evaluation on their composition so as to confirm if current members possess experience and knowledge required for one to be effective. And that Audit committee meetings should regularly discuss on organizational compliance with set financial regulations. Keywords: Composition, Frequency of meeting and Financial performance 1.1 Introduction Cooperative According to Abbott, (2010), understanding the characteristics of an audit committee is key in determining its effectiveness. Carcello (2012), emphasized that audit committees should be made up of