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1
Braswell, Mike, Roger B. Daniels, Mark Landis, and Chun-Chia (Amy) Chang. "Characteristics Of Diligent Audit Committees." Journal of Business & Economics Research (JBER) 10, no. 4 (2012): 191. http://dx.doi.org/10.19030/jber.v10i4.6895.
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The mounting attention given to audit committees following a series of corporate financial reporting failures has resulted in numerous provisions within Sarbanes Oxley Act (SOX hereafter) of 2002. The SOX addresses aspects of the audit committee, including its authority and composition characteristics, but the requirement for minimum meeting frequency for the audit committee member was absent from the final SOX provision despite the recommendations of regulators. Since audit committee activity, or degree of audit committee diligence, is determined by the audit committee itself, we investigate various firm-level and governance attributes that likely influence audit committees choice to meet more often than anticipated. After analyzing a sample of 2,715 firm-year observations spanning fiscal years 1998-2003, we find that audit committee diligence is positively associated with audit committee attributes such as financial expertise, but negatively association with audit committee tenure, suggesting that efficiency gains are enjoyed by audit committees as they become more familiar with firm-specific reporting issues. We also document positive associations between audit committee diligence and both governance and agency cost variables. Finally, we document a significant increase in audit committee diligence in the years following the implementation of the SOX 2002 provisions.
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Setiyani, Duwi. "DETERMINASI KARAKTERISTIK KOMITE AUDIT DALAM MEMPREDIKSI KONDISI FINANCIAL DISTRESS STUDI EMPIRIS PERUSAHAAN SEKTOR JASA YANG TERDAFTAR DI BEI TAHUN 2010-2012." Jurnal Akuntansi Indonesia 3, no. 1 (2016): 29. http://dx.doi.org/10.30659/jai.3.1.29-46.
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Financial distress is a condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. In financial case, corporate governance parties who had an effect on financial distress is the audit committee. This study investigates the impact audit committee characteristic on financial distress. The audit committee characteristics that use in this study are size of audit committee, independence of audit committee, frequency of audit commitee meeting, competence of audit committee, female audit committee, and audit committee nationality, this study use two control variable is sales growth and KAP reputation. The data being used is from annual report serices company which is listed in BEI in 2010-2012 period. Data collecting method which used in this research is metod purposive sampling. Based on the method purposive sampling, research sample total is 80 companies. Data analysis using logistic regression with SPSS 17. The result show that independence ofaudit committee, frequency of audit commitee meeting, female audit committee, and audit committee nationality has negative affect with financial distress. Size of audit committee and competence of audit committeem has not negative affect with financial distress.
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Supriyaningsih, Supriyaningsih, and Fuad Fuad. "THE INFLUENCE OF AUDIT COMMITTEE CHARACTERISTICS ON REAL EARNINGS MANAGEMENT." JURNAL AKUNTANSI DAN AUDITING 13, no. 1 (2016): 61–79. http://dx.doi.org/10.14710/jaa.13.1.61-79.
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Current study tests the impact of audit committees to the real earnings management.Using the manufacturing public listed companies from Indoensia Stock Exchange from 2012 until 2014, we found that that financial and accounting expertise of audit committee members and audit committee size have positive effect on real earnings management. Furthermore, we also found that the dual positions of the audit committee chairman have a negative effect on earnings management. The Tenure of audit committee chairman however, has no impact on real earnings management.
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Yustrida Bernawati, Paradisa Sukma,. "The Impact of Audit Committe Characteristics on Audit Quality." Jurnal Akuntansi 23, no. 3 (2020): 363. http://dx.doi.org/10.24912/ja.v23i3.602.
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This research was conducted to investigate the effect of audit committee characteristics on audit quality. The characteristics of the audit committee used in this study are the number of audit committees, number of audit committee meetings, audit committee education background, and audit committee experience while audit quality is measured using audit fees. This study uses manufacturing companies listed on the Indonesia Stock Exchange in 2016 - 2018 with 70 observation data and uses OLS regression. The results of this study indicate all four Audit Characteristics, only size and experience significantly influence audit quality. While audit meetings and education do not significantly affect audit quality. Likewise with the education that can not ensure the capabilities possessed by members of the audit committee. Overall, the effectiveness of the audit committee has no significant effect on audit quality.
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Martinov-Bennie, Nonna, Dominic S. B. Soh, and Dale Tweedie. "An investigation into the roles, characteristics, expectations and evaluation practices of audit committees." Managerial Auditing Journal 30, no. 8/9 (2015): 727–55. http://dx.doi.org/10.1108/maj-05-2015-1186.
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Purpose – This paper aims to investigate how the roles, characteristics, expectations and evaluation practices of audit committees have adapted to regulatory change and what practices are most conducive to effective audit committees. Design/methodology/approach – This paper uses semi-structured interviews with audit committee chairs and chief audit executives. Findings – While new regulation is a primary driver of changes in the roles of audit committees, the audit committee’s role has evolved beyond regulatory requirements. Audit committees are taking a more active role in organisational governance and performance in key areas such as risk management. However, while audit committees have a clear concept of what characteristics committee members require, conceptual frameworks and mechanisms for evaluating the performance of committees and their members remain underdeveloped. Research limitations/implications – The responses of audit committees in Australia to broader regulatory trends suggest that more research is required into how audit committees function in practice, and into developing new frameworks for evaluating the committees’ performance. This paper provides an in-depth exploration of key areas of audit committee performance, and identifies aspects that might be further investigated. Practical implications – The paper identifies key attributes of effective audit committees and especially the characteristics of audit committee members. The paper also identifies a need to improve – and in many cases create – performance evaluation frameworks and mechanisms. Given the international regulatory trend towards greater reliance on audit committees to improve governance, more policy attention is required on developing guidelines and assessment processes that evaluate whether audit committees are fulfilling their legislative mandate in practice. Originality/value – The paper contributes to the relatively new and more specific discussion on reviewing and evaluating the performance of the board and its subcommittees.
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Abbott, Lawrence J., and Susan Parker. "Auditor Selection and Audit Committee Characteristics." AUDITING: A Journal of Practice & Theory 19, no. 2 (2000): 47–66. http://dx.doi.org/10.2308/aud.2000.19.2.47.
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The role of the audit committee in corporate governance is the subject of increasing public and regulatory interest. We focus on one frequently noted function of the audit committee: auditor selection. We argue that independent and active audit committee members demand a high level of audit quality because of concerns about monetary or reputational losses that may result from lawsuits or SEC sanction. Auditors who specialize in the client's industry are expected to provide a higher level of audit quality than do nonspecialists. Thus, we predict that firms with audit committees that are both independent and active are more likely to employ an industry-specialist auditor. We find that firms with audit committees that do not include employees and that meet at least twice per year are more likely to use specialists. This study contributes to our understanding of audit committee functions and provides evidence that industry specialization is an important element of auditor selection.
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Alzeban, Abdulaziz. "Influence of audit committees on internal audit conformance with internal audit standards." Managerial Auditing Journal 30, no. 6/7 (2015): 539–59. http://dx.doi.org/10.1108/maj-12-2014-1132.
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Purpose – This study aims to provide empirical evidence of the association between audit committee characteristics and internal audit conformance with the International Standards for the Professional Practice of Internal Auditing (ISPPIA). Design/methodology/approach – Seventy-four usable responses were received from a survey of chief internal auditors (CIAs) from Saudi companies listed on the Saudi Stock Exchange. Findings – The results indicate that audit committee characteristics (the presence of independent members on the committee, members’ expertise in auditing and accounting and meeting with the CIA) influence internal audit conformance with the ISPPIA. Additionally, they demonstrate that such conformance is also influenced by CIA tenure. Practical implications – The findings of this study also have significant implications for audit committees wishing to improve their overall effectiveness, by identifying the impact of the committee’s characteristics on internal audit conformance with the ISPPIA. Originality/value – The results add to the literature on internal audit standards by introducing a Middle Eastern perspective and simultaneously providing insights for companies in their attempts to adhere to the international standards, hence, supporting efforts towards good corporate governance.
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Abbott, Lawrence J., Susan Parker, Gary F. Peters, and K. Raghunandan. "The Association between Audit Committee Characteristics and Audit Fees." AUDITING: A Journal of Practice & Theory 22, no. 2 (2003): 17–32. http://dx.doi.org/10.2308/aud.2003.22.2.17.
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This study examines the association between audit committee characteristics and audit fees, using data gathered under the recent SEC fee disclosure rules. We hypothesize that audit fees will be positively associated with audit committee independence, financial expertise, and meeting frequency. We examine a sample of 492 nonregulated, Big 5-audited firms that filed proxy statements with the SEC in the period from February 5, 2001 to June 30, 2001. We find that audit committee independence (defined as an audit committee comprised entirely of outside, independent directors) and financial expertise (defined as an audit committee containing at least one member with financial expertise) are significantly, positively associated with audit fees. This is in contrast to the findings of Carcello et al. (2002a), who find that audit committee characteristics are not significant in the presence of board-related variables. Meeting frequency (defined as an audit committee that meets at least four times annually) was not associated with higher audit fees at conventional levels. This evidence is consistent with audit committees taking actions within their span of control to ensure a higher level of audit coverage.
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Abbott, Lawrence J., Susan Parker, and Gary F. Peters. "Audit Committee Characteristics and Restatements." AUDITING: A Journal of Practice & Theory 23, no. 1 (2004): 69–87. http://dx.doi.org/10.2308/aud.2004.23.1.69.
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This study addresses the impact of certain audit committee characteristics identified by the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (BRC) on the likelihood of financial restatement. We examine 88 restatements of annual results (without allegations of fraud) in the period 1991–1999, together with a matched pairs control group of firms of similar size, exchange listing, industry and auditor type. We find that the independence and activity level (our proxy for audit committee diligence) of the audit committee exhibit a significant and negative association with the occurrence of restatement. We also document a significant negative association between an audit committee that includes at least one member with financial expertise and restatement. To test the robustness of the results we also consider a sample of 44 fraud and no-fraud firms and arrive at largely similar findings. Our results underscore the importance of the BRC's recommendations as a means of strengthening the monitoring and oversight role that the audit committee plays in the financial reporting process.
10
Al-Jalahma, Abdulla. "Impact of audit committee characteristics on firm performance: Evidence from Bahrain." Problems and Perspectives in Management 20, no. 1 (2022): 247–61. http://dx.doi.org/10.21511/ppm.20(1).2022.21.
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The purpose of this study is to analyze the relationship between different audit committee attributes and company performance in Bahrain. This paper investigates the impact of audit committee independence, size, and meeting frequency on company performance (employing ROE, ROA, and Tobin’s Q). Data from all 14 non-financial publicly listed companies on Bahrain Bourse during 2005–2019 were used. The results revealed that companies with independent audit committees and big audit committees in terms of size are performing poorly. It is also shown that the number of audit committee meetings does not affect company performance. Further, this study failed to find any association between the number of audit committee meetings and company performance. The findings show that shareholders might lack knowledge of the importance of corporate governance mechanisms. The results of this study should be of potential interest to different stakeholders, including regulators, investors, and auditors, in their attempts to improve company performance and monitoring mechanisms in emerging economies.
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Chariri, Anis, Indira Januarti, and Etna Nur Afri Yuyetta. "Audit Committee Characteristics and Carbon Emission Disclosure." E3S Web of Conferences 73 (2018): 02001. http://dx.doi.org/10.1051/e3sconf/20187302001.
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Business activities have contributed to the increasing level of carbon emissions, which can endanger the environment. Such phenomena have pushed companies to disclose a variety of carbon emission information to show their responsibilities. Thus, this study aims to investigate the influence of audit characteristics (independence, expertise, meetings) on carbon emission disclosure. Data were collected from the Nordic companies, which were registered in the 2015 Carbon Disclosure Project. A total of 105 companies were used as samples for further analysis. A regression model was then employed to analyse the data. The findings showed that all characteristics of audit committees (independent audit committee, audit committee expertise and audit committee meetings) positively affected carbon emission disclosure. This study implies that companies that are interested in disclosing carbon emission information should create more independent members of audit committees whose expertise or experiences are in accounting/finance/risk. The audit committee members should be also actively involved in regular meetings to monitor and evaluate company’s policy on carbon emission disclosure.
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Deslandes, Manon, Anne Fortin, and Suzanne Landry. "Audit committee characteristics and tax aggressiveness." Managerial Auditing Journal 35, no. 2 (2019): 272–93. http://dx.doi.org/10.1108/maj-12-2018-2109.
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Purpose This study aims to analyze the relationship between a company’s use of aggressive tax planning and several audit committee members’ characteristics, namely, independence, expertise, diligence and gender diversity. Design/methodology/approach This paper is an empirical research using archival data from 289 Canadian listed companies for the 2011-2015 period. Findings The authors find that measures of expertise and diligence are significantly related to tax aggressiveness. Financial expertise and tenure on the audit committee play an important role in constraining tax aggressiveness, as does having a larger audit committee. Research limitations/implications One limitation – and an area for future research – is that the effects of the audit committee members’ relationships with managers of the firms were not investigated. Practical implications Knowledge of audit committee characteristics may send a signal to shareholders, investors and tax agencies regarding the company’s potential risk with respect to aggressive tax planning. The analysis provides useful insights for board governance committees when determining the profile of persons to nominate for board positions and committees. In discussing tax-risk management, the study may heighten audit committee members’ awareness of their role in this respect. Originality/value This study’s results indicate that even in a setting where incentives for firms to be tax-aggressive is low compared to high-tax rate countries, there is variability in firms’ tax aggressiveness. This situation allows us to find audit committee characteristics that are effective in decreasing tax aggressiveness.
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Sun, Jerry, George Lan, and Guoping Liu. "Independent audit committee characteristics and real earnings management." Managerial Auditing Journal 29, no. 2 (2014): 153–72. http://dx.doi.org/10.1108/maj-05-2013-0865.
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Purpose – The purpose of this study is to investigate the effectiveness of independent audit committees in constraining real earnings management. This study examines the relationships between audit committee characteristics and real activities manipulation. Design/methodology/approach – US firms with stronger incentives to undertake real earnings management are selected as a sample. Regressions are run for the empirical analyses. Findings – It is found that audit committee members' additional directorships are positively associated with real earnings management measured by abnormal cash flows from operations, abnormal discretionary expenses and abnormal production costs, suggesting that audit committees with high additional directorships are less effective in constraining real earnings management. The findings are consistent with the notion that audit committee members' busyness impairs their monitoring effectiveness. Originality/value – This study extends the extant research on audit committees' oversight of real earnings management by using refined research design and updated data. This study also provides further evidence on how audit committee members' additional directorships affect their ability to oversee both accrual and real earnings management.
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Singhvi, Ankita, and Nancy Chun Feng. "Audit committee effectiveness characteristics and auditor switches involving industry specialists." Corporate Ownership and Control 18, no. 3 (2021): 57–65. http://dx.doi.org/10.22495/cocv18i3art5.
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The aim of this study is to investigate the association between audit committee effectiveness characteristics and auditor switches to or from an industry specialist audit firm. This study uses data on auditor changes from Audit Analytics, financial data from North American Compustat, and hand-collected data including audit committee characteristics (such as audit committee chair tenure, the proportion of auditing experts on the audit committee, etc.), the number of audit committee meetings and stock ownership from proxy statements between 2005 and 2011. The results reveal that firms with audit committees that have a large proportion of auditing experts are more likely to choose an industry specialist auditor when the firm switches its auditor. Furthermore, the results also show that the longer the tenure of the audit committee chair is, the more likely that the firm switches from a non-specialist to a specialist auditor. This study adds to the literature by exploring the association between audit committee effectiveness characteristics and auditor switches involving industry specialists. The findings inform regulators regarding the impact that audit committee effectiveness characteristics have on auditor switches involving specialists
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Siagian, Valentine, and Boy Daniel Siagian. "Apakah karakteristik komite audit dan independensi dewan komisaris mempengaruhi financial distress?" Management and Business Review 5, no. 1 (2021): 40–49. http://dx.doi.org/10.21067/mbr.v5i1.5597.
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This study examines the effect of audit committee characteristics and independence board of the commissioner on financial distress on companies listed in IDX30. With purposive sampling, there are 70 firm-year observations included as the sample in this study. Then we use logistic regression to run the data. The result of this study shows that audit committee characteristics which measured by the total number of the audit committees, meeting frequency of the audit committee and the accounting background of the audit committee, only the total number of audit committees affect financial distress on companies listed in IDX30, while the other characteristics don't affect financial distress. Empirically, this result shows that the higher the number of audit committees, the more likely the company could avoid financial distress.
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Vadasi, Christina, Michalis Bekiaris, and Andreas G. Koutoupis. "The impact of audit committee characteristics on internal audit professionalization: empirical evidence from Greece." Accounting Research Journal 34, no. 5 (2021): 447–70. http://dx.doi.org/10.1108/arj-05-2020-0091.
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Purpose This paper aims to provide empirical evidence of the association between audit committee characteristics and internal audit quality through internal audit professionalization. Design/methodology/approach The investigation of the research question was based on 45 usable responses that were received from a survey of chief audit executives from firms listed on the Athens Stock Exchange and combined with publicly available information from annual reports. Findings The results indicate that audit committee characteristics (independence, diligence through frequent meetings and interaction with internal audit through valuation) influence internal audit professionalization. In addition, they demonstrate that internal audit professionalization is also influenced by CEO duality and firm’s external auditor. Practical implications The findings of this study have implications for audit committees wishing to improve their overall effectiveness, by identifying areas with substantial impact on internal audit quality. Moreover, regulators of corporate governance bodies can also benefit from the results to strengthen audit committee’s efficiency regarding internal audit function oversight. Originality/value The results add to the literature on the discussion of internal audit professionalization and complement the work of other researchers in the field of audit committee’s impact on internal audit quality/effectiveness. This study attempts to fill a gap in the literature on the effect of audit committee characteristics on internal audit professionalization, an element introduced from an institutional theory perspective.
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Ojeka, Stephen A., Alex Adeboye, and Olajide Dahunsi. "Does Audit Committee Characteristics Promote Risk Management Practices in Nigerian Listed Firms?" Accounting and Finance Research 10, no. 2 (2021): 70. http://dx.doi.org/10.5430/afr.v10n2p70.
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There has been a huge and deluge of risk threatening industries at an unequalled magnitude in recent times. As such, the board of directors and senior executives are increasingly expected to manage their various organizations' risk portfolios, affecting their financial performance. This has led to the assigning of the risk assessment role to the audit committee. The board of directors and its audit committee play an essential function in Enterprise Risk Management (ERM) by building up the right condition or tone-at-the-top. Given the board's responsibilities for representing the interests of shareholders, it plays a vital role in overseeing management's approach to ERM. This study examined the relationship between audit committee characteristics and risk management of some selected listed firms in a developing country like Nigeria. The study used secondary data to describe the dependent variable (financial risk decomposed into credit risk and liquidity risk) and the explanatory variables (decomposed into audit committee accounting expertise, audit committee meetings, audit committee independence and audit committee gender). The study used pair sample t-test, student t-test, Pearson Moment Correlation and random panel data estimator for twenty (20) selected listed firms for 2012-2016. Findings indicate that there is a negative between audit committee accounting expertise and financial risk. This revealed that Accounting Expertise in Audit Committees are likely to involve in activities and practices to curb financial risk. In addition, the Audit committee meeting indicates a negative relationship with credit risk. Audit committee gender and audit committee independence have a negative effect on liquidity risk. Therefore, this study recommends that Audit committees embrace Enterprise Risk Management (ERM) to manage risks effectively across the organization. Risk management processes should be one of the major points of discussion during audit committee meetings.
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Jusoh, Yusri Huzaimi Mat, Siti Noor Azmawaty Abd Razak, Wan Nurul Basirah Wan Mohamad Noor, Ataina Hudayati, Abriyani Puspaningsih, and Farah Aida Ahmad Nadzri. "Audit Committee Characteristics and Timeliness of Financial Reporting: Social Enterprises Evidence." Contemporary Economics 16, no. 2 (2022): 211–26. http://dx.doi.org/10.5709/ce.1897-9254.478.
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There was vast research on the effectiveness of audit committees as part of the mechanisms in safeguarding shareholders’ interest and also ensuring effective financial reporting by companies. However, studies on the efficacy of audit committees as governance tools in a niche area relating to social enterprises namely cooperative societies in Malaysia is still scarce. Hence, this study intends to investigate the association between audit committee attributes namely audit committee expertise and experience, audit committee meeting frequency and audit committee size to the timeliness reporting compliance among Malaysian cooperative societies. Using qualitative research methods, 158 usable questionnaires from 59 cooperative societies were successfully gathered and analysed using SmartPLS 3 Version 3.2.8. The results obtained provided support to the notion that there is a significant positive relationship between the frequency of meetings on the timeliness reporting compliance and a significant positive relationship between audit committee size on the timeliness reporting compliance. However, the notion expecting a significant positive relationship between the expertise of the audit committee on the timeliness reporting compliance proved to be insignificant. Conclusively, the study provides theoretical and practical support to both literature and practitioners on the importance of having optimum audit committee size and high frequency of meeting in ensuring the timeliness compliance of financial reporting of cooperative societies.
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Mishra, Mamta, and Amarjeet Kaur Malhotra. "Audit Committee Characteristics and Earnings Management: Evidence from India." International Journal of Accounting and Financial Reporting 6, no. 2 (2016): 247. http://dx.doi.org/10.5296/ijafr.v6i2.10008.
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Earnings management is perceived to be a pervasive phenomenon, spread across companies and industries. It distorts earnings quality and portrays an incorrect picture of a firm’s financial performance. Accounting frauds in companies originate from a culture of widespread earnings management. Audit committees are a popular corporate governance tool to improve the credibility of financial statements. The study, evidently the first of its kind in India, seeks to examine the effectiveness of audit committees in constraining earnings management in Indian companies. Secondary data is collected for a sample of 130 companies listed on the BSE and studied for a three-year period 2013-2015. Univariate correlations, multivariate linear regression, and logistic regression models are used to conduct empirical analysis. Evidence suggests significant impact of audit committee size, multiple directorships of audit committee members and frequency of audit committee meetings on earnings quality. Other audit committee characteristics are not found to have a significant impact on the level of earnings management. Findings of the study throw up useful insights for regulators and company boards to evaluate the efficacy of board audit committees and implement additional governance measures to help preserve the integrity of financial statements.
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Visvanathan, Gnanakumar. "Audit Committee Accounting Expertise and Audit Quality – the Case of Going-Concern Opinions." Accounting and Finance Research 10, no. 3 (2021): 27. http://dx.doi.org/10.5430/afr.v10n3p27.
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This study examines whether audit committee accounting expertise and other audit committee characteristics promote or deter the likelihood of receiving going-concern reports from the auditors and whether such characteristics shield auditors from dismissals after the issuance of a going-concern report. The study finds no significant association between the likelihood of a going-concern report and audit committee accounting expertise or other audit committee characteristics. No significant association is also found for auditor dismissals following going-concern reports and audit committee accounting expertise. These results contrast with prior literature that examined data preceding the passage of the Sarbanes-Oxley Act of 2002 (hereafter SOX) or the period immediately thereafter. Additional analysis shows that audit committee accounting expertise is found to improve the information in going-concern audit opinions by reducing Type I errors, however. Overall, these findings shed light on the evolving role of audit committees in overseeing the auditors and have implications for regulators interested in improving audit quality and investors interested in improving the effectiveness of audit committees.
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Vafeas, Nikos. "On Audit Committee Appointments." AUDITING: A Journal of Practice & Theory 20, no. 1 (2001): 197–207. http://dx.doi.org/10.2308/aud.2001.20.1.197.
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This study examines determinants of audit committee appointment by comparing characteristics of 262 nonexecutive directors appointed to corporate audit committees between 1995 and 1998 with characteristics of 262 nonexecutive, age-matched control directors. The likelihood of audit committee appointment is found to increase with the degree of outside director independence, and decrease with compensation committee membership, other committee memberships, and the length of board tenure. Importantly, audit committee appointments are unrelated to the amount of stock owned by directors and the number of other directorship posts they hold. Together, these results highlight several director attributes beyond affiliation that could be important in guiding director decisions and suggest the need for further research toward understanding the quality of audit committee appointments.
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Qeshta, Dr Mohammed Helmy. "Audit Committee Characteristics and Firm Performance: Evidence from the Insurance Sector in Bahrain." Revista Gestão Inovação e Tecnologias 11, no. 2 (2021): 1666–80. http://dx.doi.org/10.47059/revistageintec.v11i2.1789.
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This study examines the impact of the Audit Committee's characteristics on the performance of the five insurance companies listed on the Bahrain Burse over the period from 2012 to 2019. This study uses four board characteristics indicators; the size of the audit committee, independence of the audit committee, frequency of meetings of the audit committee, and expertise of the audit committee. Besides, this study takes into account two control variables, such as company size and firm age. Three-panel models used with a different dependent variable for each one were used in this study. The results of the study showed a statistically significant negative relationship between meetings of the audit committee and performance. The size of the audit committee, the independence of the audit committee and the experience of the audit committee have no significant association with the performance of the insurance companies listed on the Bahrain Stock Exchange. Alternatively, other AC features, different from those examined in this work, can be examined in future studies, such as the financial experience of its chair, the tenure of the committee and family ownership.
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Bouaine, Wided, and Yosr Hrichi. "Impact of Audit Committee Adoption and its Characteristics on Financial Performance: Evidence from 100 French Companies." Accounting and Finance Research 8, no. 1 (2019): 92. http://dx.doi.org/10.5430/afr.v8n1p92.
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The aim of this paper is to examine the impact of legal creation of audit committees on financial firm performance. Precisely, we examine the impact of the establishment of audit committee, following the enactment of Ordinance No. 2008-1278, on financial firm market performance. Moreover, we investigate whether the audit committee characteristics such as independence of the members of the audit committees, the size; the accounting and financial expertise of the committee members as well as the frequency of audit committee meetings determine financial performance.We choose two measures for performance namely ROE and ROA. We conduct a panel study for a sample of 100 French companies listed on the Paris Stock Exchange from 2007 to 2015.The results show that the appearance of a legal text pushes the establishment of the committee but has no significant effect on the company's performance. This can be explained by the strong voluntary adoption of the audit committee following the publication of the Viénot Reports (Saada, 1998).
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Musah, Alhassan, Bismark Okyere, Deodat Emilson Adenutsi, Christian Thywill Dodor, and Makafui David Agboado. "Audit committee characteristics and audit quality on risk-taking behaviour of banks in an emerging economy." Corporate Ownership and Control 20, no. 1 (2022): 125–35. http://dx.doi.org/10.22495/cocv20i1art12.
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The study examined the effect of audit committee size, audit committee independence and audit quality on bank risk-taking behaviour in Ghana. The study collected data on 18 out of 24 commercial banks in Ghana over a 10-year period. The study relied on panel-corrected standard errors (PCSE) to establish the relationship between the variables mentioned above. The results of the study showed that audit quality reduces bank risk-taking behaviour in Ghana. The study also found that audit committee independence reduces excessive risk-taking behaviour by banks in Ghana thereby increasing their Z-scores. The study also found that even though there was a positive coefficient between audit committee size and the Z-scores of commercial banks in Ghana, the relationship was statistically insignificant. On the control variables, the study found that bank liquidity reduces risk-taking behaviour whiles non-performing loans increases bank risk-taking behaviour. The implication of the finding is that the Bank of Ghana should emphasize the need for banks to have independent audit committees and high-quality audits to help reduce their excessive risk-taking behaviour to prevent another financial sector clean-up. The study is important as it demonstrates the importance of audit quality and audit committee independence in reducing excessive risk-taking by commercial banks in Ghana which is critical for the sustenance of the financial system of Ghana. The study also supports the theoretical view that quality audit helps to improve the monitoring of management and ensure that banks are run properly
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Ni Made Dwi Ratnadi, I. Nyoman Wijana Asmara Putra,. "Institutional Ownership, Characteristics of the Audit Committee and Information Power Earnings." Jurnal Akuntansi 22, no. 3 (2018): 405. http://dx.doi.org/10.24912/ja.v22i3.396.
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The objective of this research to test the effect of institusional ownership and committee audit characteristic on the informativeness of earnings. Especially this research to test the non-banking institusional ownership, banking institusional ownership, independent commissioner as the member of audit committee, competence a member audit commitee in accounting and financial, and frequency of meeting held by audit committee. The data is taken from secondary sourced from the Indonesian Stock Exchange. Data were analyzed using multiple regression. The result indicates that, the non-banking institutional ownership, and shareholding by banks positive effect on the informativeness of earnings. Competence audit committee members in the fields of accounting and finance, and frequency of meetings held positive effect on informativeness of earnings. However, the proportion of independent directors on the audit committee does not affect to the earnings informativeness.
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Zulfikar, Rudi. "Pengaruh Komisaris Independen dan Karakteristik Komisaris Audit Terhadap Internet Financial Reporting Disclosure." Akuisisi: Jurnal Akuntansi 15, no. 2 (2020): 9–17. http://dx.doi.org/10.24127/akuisisi.v15i2.385.
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This study aimed to analyze the influence of the proportion of Independent Commissioner and the characteristics Audit Committee to internet financial reporting disclosure. Proportion of Independent Commissioner measured by the ratio of owned Independent Commissioner to Board of Commissioners. Characteristics of the Audit Committee is proxied by the size, Audit Committee’s meeting frequency, the Audit Committee expertise in accounting / financial, and the independent parties of the Audit Committee’s proportion. Internet financial reporting disclosure is measured by the disclosure items required under the Bank Indonesia Regulation No. 7/50/PBI/2005. The sample in this research were 90 companies, and samples used in this study were banking companies listed in Bank Indonesia during the years 2011-2014. Statistical method used is multiple regression analysis. Based on the test results show that the proportion of independent commissioner, had no effect to internet fianncial reporting disclosure. And then, the characteristics of an audit committee comprised of several proxies which are the size of the Audit Committee, Audit Committee’s meeting frequency, Audit Committee expertise in financial / accounting, and the independent parties of the Audit Committee had a positive and significant effect to the internet financial reporting disclosure. Size as control variabel had a positive and significant effect to the internet financial reporting disclosure.
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Hasnan, Suhaily, Nur Syafiqah Mohamad Eskandar, Alfiatul Rohmah Mohamed Hussain, Ahmed Abdullah Saad Al-Dhubaibi, Mohd Ezrien Mohamad Kamal, and Rohmawati Kusumaningtias. "Audit committee characteristics and financial restatement incidence in the emerging market." Corporate and Business Strategy Review 3, no. 2 (2022): 20–33. http://dx.doi.org/10.22495/cbsrv3i2art2.
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This paper discusses issues concerning audit committee characteristics that lead to the occurrence of financial restatements in Malaysian public listed companies (PLCs). The audit committee characteristics were measured using size, independence, frequency of meetings, audit tenure, gender, expertise, age, ethnicity, legal qualifications, and political connections. The data in this study were extracted from the annual reports of 100 firms that had restated their financial statement between 2006 and 2015, and a total of 200 non-restatement firms were matched and observed as control firms. Using univariate and multivariate statistical analysis, the results evince that there is a significant association between audit committee size and frequency of meetings as well as ethnicity and political connections of the audit committee members and the occurrence of financial restatements in Malaysian PLCs. However, the remaining audit committee characteristics show insignificant association with the occurrence of financial restatements. Consistent with Wan Mohammad, Wasiuzzaman, and Nik Salleh (2016), the results show that larger and more rigorous audit committees can strengthen the monitoring role and consequently reduce the occurrence of financial restatements. In addition, the results evince that Malay members in the audit committee have widespread political connections, which negatively affect the decisions by the audit committee, thereby increasing the occurrence of financial restatements.
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Sil Kang, Won, Alan Kilgore, and Sue Wright. "The effectiveness of audit committees for low‐ and mid‐cap firms." Managerial Auditing Journal 26, no. 7 (2011): 623–50. http://dx.doi.org/10.1108/02686901111151341.
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PurposeThe purpose of this paper is to investigate the effectiveness of recommendations made by the Australian Stock Exchange (ASX) relating to audit committees in Australia, and whether they have improved financial reporting quality for low‐ and mid‐cap listed firms.Design/methodology/approachThe authors examine the relation between characteristics of the audit committee and financial reporting quality for listed companies not mandated to comply with these requirements, i.e. low‐ and mid‐cap firms. For a sample of 288 firms, the authors regress measures of audit committee independence, expertise and activity and size on alternative measures of earnings management.FindingsA significant association is found between all three characteristics and lower earnings management. The significant measure for independence is the proportion of independent directors on the audit committee; for expertise, it is that at least one member of the audit committee has an accounting qualification; and for activity and size, it is the frequency of audit committee meetings.Practical implicationsThe results provide support for the mandatory establishment of audit committees for the top 500 (high‐ and mid‐cap) firms introduced by the ASX and suggest those audit committee characteristics which could improve financial reporting quality for low‐ and mid‐cap firms.Originality/valueThe paper examines low‐ and mid‐cap firms in order to complement previous similar studies done for high‐cap firms. It identifies the effects on financial reporting quality of voluntarily choosing to have an audit committee and of the choice of audit committee characteristics, in the period after substantial corporate governance reform. It includes a new measure among audit committee characteristics, industry expertise, which is required in Australia and is new to the literature.
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Windram, Brian, and Jihe Song. "Non-executive directors and the changing nature of audit committees: Evidence from UK audit committee chairmen." Corporate Ownership and Control 1, no. 3 (2004): 108–15. http://dx.doi.org/10.22495/cocv1i3p10.
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In this paper we provide a descriptive summary of a postal survey of FT 500 UK company audit committee chairman on the operations of UK audit committees. The survey represents an “insider view” of the activities of audit committees and the characteristics of non-executive directors and contributes to the continuing debate on corporate governance reforms. In particular we report on company boards and their composition, audit committee chairman and their outside directorships, financial literacy and remuneration and various aspects of audit committee activity. Our survey shows that UK audit committees and corporate boards have undergone many changes in the last decade since the last comprehensive survey reported in Collier (1992). Our study on the current level of activity within major UK corporate audit committees deepens understanding of the roles and characteristics of non-executive directors and the operation of UK audit committees. In particular our survey shows that there is a significant shift in audit committee activities from the traditional financial reporting role to a greater focus on internal control and risk management. Independence is overwhelmingly seen as the most significant attribute of an audit committee member. Lack of time is perceived to be the greatest impediment to audit committee effectiveness but pressure from executives and an unclear remit are surprisingly prevalent problems even after ten years of corporate governance reforms.
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Sultana, Nigar, Harjinder Singh, and J.-L. W. Mitchell Van der Zahn. "Audit Committee Characteristics and Audit Report Lag." International Journal of Auditing 19, no. 2 (2014): 72–87. http://dx.doi.org/10.1111/ijau.12033.
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Jwailes, Ahmad Rajab, and Rasha Hamada. "The Effect OF Audit Committee Characteristics ( Committee Size , Committee Independence , Committee Gender Diversity ,Committee Frequency Of Meetings On Jordanian Firm Performance TQ." IJRDO - Journal of Business Management 7, no. 10 (2021): 14–32. http://dx.doi.org/10.53555/bm.v7i10.4659.
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This paper seeks to investigate the effect of audit committee characteristics on the company’s performance. The sample consists of 198 non-financial companies listed on the Amman Stock Exchange (ASE) over the period 2010-2020. The results of the study show that the audit committee size, independence and gender diversity have a significant positive relationship with firm’s performance TQ whereas experience and frequency of meetings has an insignificant association. The results of the study could be beneficial for managers and boards in making suitable choices about audit committee characteristics and corporate governance mechanisms to enhance the company’s performance. The study gives policy makers a better understanding of the different characteristics required of an audit committee, for incorporation in future policy preparation to protect the shareholders’ interests. The relationship between audit committee characteristics and company performance is still ambiguous. This study contributes to the literature by identifying the role of audit committee characteristics in company performance, providing evidence for the view that performance is driven by specific audit committee characteristics.
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Aryan, Laith A. "The Relationship between Audit Committee Characteristics, Audit Firm Quality and Companies’ Profitability." Asian Journal of Finance & Accounting 7, no. 2 (2015): 215. http://dx.doi.org/10.5296/ajfa.v7i2.8530.
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<p>Jordan displayed keen interest in corporate governance in terms of enhancing the quality of financial statements and to restore the investors’ confidence. This study aimed to highlight the role of audit committee and external audit in enhancing companies’ profitability. Since there are contradictions in previous studies results, there is a need to test these relationships in Jordanian context to provide empirical evidence on this issue,especially after the corporate governance application became mandatory since 2009. This study has used industrial sector, which include 91 companies, only 69 companies were included in this study, the other 22 companies were excluded either newly listed or delisted during the study period (2009-2014). Multiple regression were used to analyze the data, the result showed positive relationships between audit committee meeting, audit committee size and companies profitability, while no significant relationship between audit committee composition, audit committee members literacy, audit quality and companies profitability. Such results would be beneficial to companies’ corporate governance committees to play their supervisory role. </p>
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Olabisi, Jayeola, Sunday Kajola, Segun Owoeye, and Taofeek Agbatogun. "Impact of Audit Committee Characteristics on Earnings Management in Nigerian Listed Consumer Goods Firms." Vestnik Volgogradskogo gosudarstvennogo universiteta. Ekonomika, no. 1 (March 2022): 119–30. http://dx.doi.org/10.15688/ek.jvolsu.2022.1.11.
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This study assessed the impact of audit committee characteristics on earnings management of Nigerian listed consumer goods firms. The study adopted a correlational research design using secondary data extracted from the financial statement of selected 10 firms from 2010 to 2019. The selected firms were from 21 listed consumer goods firms listed in Nigeria as of 2019 using a judgmental sampling technique based on the availability of data. Correlation analysis, Unit-root test, Ordinary Least Squares (Fixed effects) regression were the statistical tools used for analysis with the aid of E-views Software, version 10. The study revealed a significant and negative relationship between Audit Committee Meetings, Audit Committee Size, Leverage, and Earnings Management (P < 0.05). However, Audit Committee Financial Expertise, Audit Committee Independence showed a positive and insignificant relationship with earnings management (p > 0.05). The study concluded that firms with adequate audit committees attribute moderate earnings management practices. The study suggested that shareholders and regulatory bodies should ensure adequate and effective audit committee structure.
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Sharhan, Alaallah A. M., and Chandan Bora. "Effect of Audit Committee characteristics on Audit Quality: A Critical Literature Review." Journal of Advanced Research in Economics and Administrative Sciences 1, no. 1 (2020): 1–12. http://dx.doi.org/10.47631/jareas.v1i1.14.
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Purpose: The aim of the paper is to present a critical literature review of the impact of audit committee characteristics (ACCs) on audit quality and to identify any research gaps in the field of audit quality. The aim is also to establish, if any, research gaps in the area of audit quality and to recommend any for potential research. 
 Approach/Methodology/Design: The methodology of this study is a review of literature on audit committee characteristics and audit quality. A number of research articles were analyzed.
 Findings: The results of this review of literature revealed that audit committee size, audit committee meeting, and audit committee financial expertise have main effects on the audit quality in the public and private sectors. 
 Practical Implications: This review article gives an opportunity to auditors, management of audit offices and other stakeholders to better understand the pillars of audit quality, factors, and framework to reinforce the quality of the financial statements. This literature review contributes to better understanding of the role of the audit committee in financial statements. It provides researchers in the field with insights and new perspectives. 
 Originality/value: The paper identifies certain gaps and highlights the effect of effective audit committee on regulating and improving the finance department of any institution. The study also contributes to the operating organization of knowledge on the audit quality, dimensions of audit quality, and governing frameworks. It emphasizes the audit committee’s effectiveness and also presents an opportunity to both researchers and the finance sector for potential future research.
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Mawardi, Wisnu, Harjum Muharam, and Mulyo Haryanto. "The Role of Audit Committee Characteristics and I.C. Performance on I.C. Disclosure: Evidence from the Indonesian Banking Sector." Economies 11, no. 1 (2022): 7. http://dx.doi.org/10.3390/economies11010007.
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This study aims to analyze the influence of audit committee characteristics and intellectual capital performance on intellectual capital disclosure. Characteristics of the audit used in this research are the size of the audit committee, the Number of audit committee meetings, and the financial expertise of the audit committee. The population in this study is a financial services company listed on the Indonesia Stock Exchange in 2019–2021 and collected a sample of 91 companies using the purposive sampling technique. The analysis method used in this research is multiple linear regression using the software SPSS 20. The test result of this study shows that an audit committee or several audit committees positively affect intellectual capital disclosure. However, at the same time, the financial expertise of the audit committee and intellectual capital performance does not affect intellectual capital disclosure.
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Leng, Huiyi. "The Effect of the Independence, Expertise and Activity of the Audit Committee On the Quality of the Financial Reporting Process." Frontiers in Business, Economics and Management 7, no. 1 (2022): 17–20. http://dx.doi.org/10.54097/fbem.v7i1.3688.
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This paper critically assesses the importance and impact of 3 main characteristics of audit committee independence, expertise and activity on the overall effectiveness of audit committees and the quality of the financial reporting process, based on corporate governance and regulatory debates and relevant research evidence, combined with statistics and analysis of data relating to these characteristics of audit committees of significant international companies. The results found that audit committee independence plays an important, but questionable, role in the monitoring of financial information, disclosure of internal controls and the company's financial reporting process. Secondly, the expertise of audit committee professionals can enhance the quality of financial reporting. Finally, a diligent audit committee can, to some extent, improve the level of oversight of the financial reporting process of the activity.
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Kao, Mao-Feng, Min-Jeng Shiue, and Chien-Hao Tseng. "Voluntary audit committees, auditor selection and audit quality: evidence from Taiwan." Managerial Auditing Journal 36, no. 4 (2021): 616–42. http://dx.doi.org/10.1108/maj-04-2020-2632.
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Purpose This study aims to examine the Taiwan setting, where audit partners’ names are presented in the audit report and where audit committee formation is voluntary in the initial stage of audit committee reform. This paper investigates the effects of the formation of voluntary audit committees on the selection of individual audit partners, and, in turn, the audit quality. This contrasts with previous studies investigating the relationship between audit committees and auditor selection at the audit firm level. Design/methodology/approach This paper samples all of Taiwan’s publicly listed firms for the period 2007–2012 and uses Heckman’s (1979) two-stage estimation model to achieve our objectives. Findings Using different characteristics of individual engagement partners as proxies for a higher quality auditor, the main empirical results show that voluntary audit committee formation is positively related to an industry specialist lead partner and a lead partner that has a larger number of clients. In addition, this paper also finds that voluntary audit committee formation has a positive impact on audit quality (proxied by discretionary accruals). The results suggest that the voluntary formation of an audit committee contributes positively to both auditor selection and audit quality. Furthermore, an additional test shows that the main empirical results are robust to a validity threat that firms that have good corporate governance prior to the formation of voluntary audit committees tend to select high-quality audit partners. Originality/value The paper contributes to the audit committee literature in the following ways: this paper takes advantage of Taiwan’s unique setting, where forming an audit committee is not compulsory in the initial stage of audit committee reform, to investigate the voluntary audit committee, auditor selection and audit quality; this paper expands on Abbott and Parker’s (2000) study of audit committee characteristics and auditor selection at the audit firm level by examining this relationship at the individual audit partner level; this paper responds to the call by Church et al. (2008) and DeFond and Francis (2005) who propose more studies on audit quality at the individual engagement partner level.
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Pradnyadari Pemayun, Cokorda Istri Mas, and Ida Bagus Putra Astika. "Karakteristik Komite Audit Pada Audit Report Lag." E-Jurnal Akuntansi 31, no. 1 (2021): 152. http://dx.doi.org/10.24843/eja.2021.v31.i01.p12.
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This study examines the relationship between the characteristics of the Audit Committee and Audit Report Lag. Audit committee characteristics are measured by several variables, namely the size of the audit committee, the independence of the audit committee, and the audit committee meeting. This research was carried out on manufacturing companies listed on the Indonesia Stock Exchange in 2014-2016. The number of samples used in this study were 44 companies obtained by purposive sampling method. Data analysis techniques were carried out using multiple linear regression analysis techniques. Based on the results of the analysis, it shows that the audit committee characteristics as measured by the size of the audit committee have a significant negative effect on audit report lag. This study also found that the independence of the audit committee had a positive influence and the audit committee meeting had no effect on audit report lag.
 Keywords: Audit Committee Size; Audit Committee Independence; Audit Committee Meeting; Audit Report Lag.
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Umar, Abbas, and Shehu Usman Hassan. "INSTITUTIONAL SHAREHOLDING A MODERATOR TO AUDIT COMMITTEE CHARACTERISTICS AND EARNINGS MANAGEMENT OF LISTED CONGLOMERATE FIRMS IN NIGERIA." Scholedge International Journal of Business Policy & Governance ISSN 2394-3351 4, no. 10 (2018): 98. http://dx.doi.org/10.19085/journal.sijbpg041001.
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The relevance of audit committee characteristics in constraining managerial opportunistic tendencies has been explored by various researchers; the confrontational view in terms of the direction of their relationship has paint a vague picture which begs the introduction of other monitoring mechanism that may give a clear cut picture on direction of this relationship. This study uses two-stage least squares model and examines the impact of audit committee characteristics, institutional shareholding on discretionary accruals of listed conglomerate firms in Nigeria. Secondary data were extracted from the annual reports of 6 most active listed firms on the Nigerian Stock Exchange for the period 2006 to 2015. After running the OLS regression, a robustness test was conducted for validity of statistical inferences. A multiple regression was employed using HACC Model. The study documents that audit committee characteristic and institutional shareholding has significant impact on earnings management of the firms, specifically, audit committee size, audit committee financial expertise and institutional shareholding are inversely related with earnings management, while audit committee independence is positively and significantly related with earnings management, but there is no such impact of audit committee meetings. Furthermore, institutional shareholding and audit committee size are inversely related with earnings management; audit committee independence and institutional shareholding are positively, strongly and significantly constraining earnings management, while audit committee financial expertise with committees’ meetings and institutional shareholding reveals no impact on earnings management. In line with the findings, the study recommended that regulatory bodies like CAMA, SEC, and NSE should ensure that listed conglomerate firms in Nigeria strictly adhere with code of best practice so that the interest of various stakeholder’s would be fully protected.
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Oluoch, DR Oluoch, and DR Tabitha Nasieku. "RELATIONSHIP BETWEEN AUDIT COMMITTEE CHARACTERISTICS AND THE AUDIT EXPECTATION GAP WITHIN STATE CORPORATIONS IN KENYA." American Journal of Accounting 3, no. 1 (2018): 1–13. http://dx.doi.org/10.47672/ajacc.333.
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Purpose: The current study sought to identify the relationship between audit committee characteristics and the audit expectation gap within the public sector in Kenya.Methodology: The study adopted a positivism philosophy and a descriptive research design in solving the research problem. The target population for the research was pooled from audit committee members in all the 119 state parastatals. The study relied on primary data that was collected using semi-structured questionnaires and key informant interview schedules. This was further supplemented using secondary data that was sourced from government reports and published reports. The collected data was analyzed using descriptive and inferential statistics. Statistical tests such as ANOVA and t-test was conducted to help in accepting or rejecting the research hypothesis.Results: The study findings indicated that audit committee composition R2 = .107 and audit committee meetings R2 = .19 had the highest association with audit expectation gap in state corporations.Unique contribution to theory, practice and policy: The study recommends that gender inclusion should be upheld within the public sector and more so within audit committees. Further in constituting audit committees there is need for stakeholders to ensure individual competencies such as technical skills, leadership qualities and integrity are available to help mitigate expectation gap. More so there should be appropriate skill mix within the audit committee which should be regularly assessed to ensure conformity to best standards of practice.
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Carcello, Joseph V., and Terry L. Neal. "Audit Committee Characteristics and Auditor Dismissals following “New” Going-Concern Reports." Accounting Review 78, no. 1 (2003): 95–117. http://dx.doi.org/10.2308/accr.2003.78.1.95.
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One important role of audit committees is to protect external auditors from dismissal following the issuance of an unfavorable report. We examine auditor dismissals following new going-concern reports that Big 6 firms issued between 1988 and 1999. Our findings suggest that audit committees with greater independence, greater governance expertise, and lower stockholdings are more effective in shielding auditors from dismissal after the issuance of new going-concern reports. In addition, we find that the relation between audit committee independence and auditor protection from dismissal has grown stronger over time. Finally, independent audit committee members experience a significant increase in turnover rate after auditor dismissals. These findings, coupled with those from Carcello and Neal (2000), suggest that when affiliated directors dominate the audit committee, management often can (1) pressure its auditor to issue an unmodified report despite going-concern issues, and (2) dismiss its auditor if the auditor refuses to issue an unmodified report.
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Oussii, Ahmed Atef, and Neila Boulila Taktak. "Audit committee effectiveness and financial reporting timeliness." African Journal of Economic and Management Studies 9, no. 1 (2018): 34–55. http://dx.doi.org/10.1108/ajems-11-2016-0163.
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Purpose The purpose of this paper is to investigate whether there is any relationship between the effectiveness of an audit committee and the financial reporting timeliness of Tunisian listed companies as proxied by external audit delay (AD). Analysis focuses on five audit committee characteristics: authority, financial expertise, independence, size and diligence. Design/methodology/approach Empirical tests address 162 firm-year observations drawn from Tunisian listed companies during 2011-2013. Findings Multivariate analyses indicate that audit committees with members who have financial expertise are significantly associated with shorter AD. Thus, the results suggest that audit committee financial expertise contributes to the improvement of financial statements’ timeliness. Research limitations/implications The audit committee attributes examined in this study were based on DeZoort et al. (2002) framework. There could be other aspects of audit committee effectiveness such as audit committee tenure and audit committee chair characteristics, which were not addressed in the present study. Thus, future research may consider and examine these other components of audit committee effectiveness. Practical implications Findings have managerial implications. Companies can re-look into how to further improve audit committee composition in order to enhance the timeliness of financial reporting. The issues of audit committee effectiveness and timely reporting also affect regulators and policy makers since they need to play a role in the establishment of effective audit committees and the improvement of financial reporting timeliness. Originality/value This study is one of few that have examined the impact of audit committee effectiveness on ADs in an emerging market country. Findings lend credence to the belief that audit committee members’ financial expertise enhances the quality of financial reporting by firms in a North African market criticized for the lack of maturity of its corporate governance system (Klibi, 2015; Fitch Ratings, 2009).
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Van der Zahn, Mitchell, and Inderpal Singh. "Voluntary decisions on audit committee composition and expertise and the influence of board of director characteristics: Further evidence from Singapore." Corporate Board role duties and composition 1, no. 2 (2005): 49–65. http://dx.doi.org/10.22495/cbv1i2art4.
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Our study empirically examines the association between four board of director characteristics and two audit committee dimensions. The audit committee dimensions are the level to which Singapore publicly listed firms voluntarily (1) include more independent directors on their audit committee beyond the mandatory minimum majority of independent directors and (2) improve the collective knowledge and experience of this standing committee by including suitably qualified independent directors. Our analysis is based on hand collected data from 430 domestically incorporated firms listed on the Singapore Stock Exchange (SGX) at the end of 2003. We find Singapore publicly traded firms are likely to voluntarily include more independent directors on their audit committees beyond the mandated minimum majority when (1) the size of the board of directors increases, (2) firms segregate the positions of Chief Executive Officer (CEO) and Chairperson of the board, and (3) the proportion of independent directors serving on the board of directors increases. The percentage of independent directors with directorate interlocks appears not to influence a firm’s decision to voluntarily include more independent directors on their audit committees. We also find a statistically significant association between (1) duality (negative) and (2) percentage of independent directors with directorate interlocks (positive) and propensity for Singapore firms to voluntarily increase the collective knowledge and experience of the audit committee’s independent directors. Contrary to expectations board size and the proportion of independent directors are not significant determinants.
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Al Naim, Fahad, and Thamir Al Barrak. "The Role of Audit Committees in Limiting Earnings Management: An Empirical Study of Saudi Corporations." Humanities and Management Sciences - Scientific Journal of King Faisal University 22, no. 2 (2021): 1–9. http://dx.doi.org/10.37575/h/mng/0093.
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This study aims to measure the impact that audit committees have on earnings management for companies listed on Tadawul Stock Exchange. The sample includes firms in the basic materials sector for the years 2017 and 2018. The modified Jones model is used to investigate the impact of audit committee characteristics (independence, financial expertise, size, number of meetings, and percentage of shares owned) on earnings management. The results show that the greater the audit committee’s independence, percentage of shares owned, and number of meetings held contribute to limited earnings management. However, no evidence is found to support that financial experience or audit committee size have an impact on earnings management.
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Buallay, Amina. "Audit committee characteristics: an empirical investigation of the contribution to intellectual capital efficiency." Measuring Business Excellence 22, no. 2 (2018): 183–200. http://dx.doi.org/10.1108/mbe-09-2017-0064.
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Purpose In a knowledge economy, it is generally agreed that audit committees play a significant role in supporting the overall firm’s knowledge, particularly enhancing the reporting process. In this respect, this paper aims to examine the effect of audit committee characteristics on intellectual capital efficiency. Design/methodology/approach This study examined 59 banks for five years (2011-2015), obtaining 295 observations. The study’s independent variable is audit committee characteristics. The dependent variable is intellectual capital components (Human: human capital efficiency [HCE]; Structural: structural capital efficiency [SCE]; Relational: relational capital efficiency [RCE]; and Physical/Financial: capital employed efficiency [CEE]). In addition, the study used four bank-specific control variables. Findings The findings deduced from the empirical results demonstrate that there is a significant positive impact of audit committee characteristics on intellectual capital. Moreover, the relationship between audit committee and intellectual capital components (HCE, SCE, RCE and CEE) also has a significant positive relationship if measured individually. Originality/value The study provides insights about the relationship between audit committee characteristics and the improvement in intellectual capital efficiency, which might be used by firms to re-arrange the roles within audit committee, to reassign internal priorities and to escalate position in their environment.
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Rifai, Mohamad, and Sylvia Veronica Siregar. "The effect of audit committee characteristics on forward-looking disclosure." Journal of Financial Reporting and Accounting 19, no. 5 (2021): 689–706. http://dx.doi.org/10.1108/jfra-05-2019-0063.
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Purpose This study aims to examine the effect of the audit committee characteristics on forward-looking disclosure. Design/methodology/approach The characteristics of audit committee that examined are audit committee expertise, audit committee meeting frequency and audit committee size. To measure the extent of forward-looking disclosure, this study did content analysis using a checklist of 22 forward-looking items. The samples of this research are 285 non-financial firms listed on the Indonesia Stock Exchange in the year 2015. Ordinary least square regression is used for hypotheses testing. Findings The results of this study show that the audit committee accounting expertise, audit committee financial expertise, the frequency of audit committee meetings and the size of the audit committee have a significant positive effect on the forward-looking disclosure. Originality/value To the best of the authors’ knowledge, this is the first study examining the audit committee characteristics on forward-looking disclosure in the context of Indonesia, one of the emerging markets.
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Eriandani, Rizky, and Melly Karina Kurniawan. "Earnings Management, Audit Committee effectiveness and The Role of Auditor Characteristics." 11th GLOBAL CONFERENCE ON BUSINESS AND SOCIAL SCIENCES 11, no. 1 (2020): 9. http://dx.doi.org/10.35609/gcbssproceeding.2020.11(9).
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This research aims to provide empirical evidence regarding the effect of auditor characteristics on the relationship between audit committee effectiveness and earnings management. Mechanisms of good corporate governance can limit and control the opportunistic actions of management. The higher level of effectiveness of the audit committee will reduce the tendency of companies to practice earnings management. In addition to the Audit Committee as an internal party that oversees the credibility of financial statements, it is also necessary to supervise external parties, namely external auditors. So that with an effective audit committee and the function of the external auditor it is expected to reduce earnings management. Agency theory is used as a theoretical framework to provide a robust theoretical framework for investigating manager behavior in various companies. In this perspective, agency theory provides a clear understanding of the effectiveness of audit committees and the characteristics of auditors, and recognizes this as the most crucial oversight mechanism that reduces agency costs, manages conflicts of interest, and mitigates earnings management. The contribution of this research to the existing literature both theoretically and empirically. Theoretically, it will add governance theory about the interaction between the audit committee and external auditors in ensuring the quality of financial reporting. Empirically, the results of research on corporate governance and reporting quality reveal that the majority of them have been conducted in countries with advanced capital markets. In contrast, studies conducted in countries with developing capital markets are still scarce. Keywords: Audit Committee, Earnings Management, Auditor, Audit Quality
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Lutfi, Abdalwali, Saleh Zaid Alkilani, Mohamed Saad, et al. "The Influence of Audit Committee Chair Characteristics on Financial Reporting Quality." Journal of Risk and Financial Management 15, no. 12 (2022): 563. http://dx.doi.org/10.3390/jrfm15120563.
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This study examines the extent to which the characteristics of the audit committee chair enhance the quality of financial reports and reduce the possibility for companies to receive a modified audit opinion (MAO) from an external auditor. We apply logistic regression to investigate the influence of Audit Committee Chair (ACC) characteristics on the FRQ (FRQ), for a sample of 460 firm-year observations (service and industrial company listed) on the Amman stock exchange for the years 2017–2020. This study uses the MAO as a proxy for Financial Reporting Quality (FRQ). The results of this study confirmed that the characteristics of the chair of the audit committee have significant and clear impacts on the quality and efficiency of financial reports, which is in line with previous studies that have addressed this topic. The results also indicated that researchers, academics, regulators, and policymakers should not look just at the characteristics of audit committees as a whole, given that audit committee chairs have effects on financial reports. This study presents its contribution through experimental demonstration of the characteristics of the chair of the audit committee and how these affect the financial reports of companies. It also provides a guide for benefits for working to provide a basis for organizational procedures, especially those related to the impact on corporate boards and internal and external auditing.
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Azam, Mohammed, and Man Wang. "The Effects of the Audit Committee Independence and Expertise on Firms' Value, an Empirical Study on Palestine Empirical Study on Palestine." International Journal of Economics and Financial Research, no. 71 (February 27, 2021): 14–20. http://dx.doi.org/10.32861/ijefr.71.14.20.
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This study examined the influence of the characteristics of the audit committee on Palestinian firms’ value. The research explores precisely the effect on the Audit Committee characteristics’ efficiency, namely, independence, expertise, evaluating the relationship among dependent and independent variables. Secondary data collected from a list of companies were registered in the Palestine Stock Exchange from 2011 to 2018. Individual variables considered are the independence & expertise of the audit committee, whereas the ROA is employed as the dependent variable as an indicator of a firm’s value. The results showed that the Audit Committee’s independence & expertise substantially positive with ROA. The study concluded that the audit committee’s characteristics are enhancing firm performance. The implications of this study’s findings can be used by decisions and policymakers, the firm’s management, and other stockholders’ interests to create reliable ties between agents and the principals.
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Al-Otaibi, Abdullah, and Mohamad Nashat. "The role of audit committees in improving the earnings quality." International Journal of ADVANCED AND APPLIED SCIENCES 9, no. 5 (2022): 119–26. http://dx.doi.org/10.21833/ijaas.2022.05.015.
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The research aims to measure the impact of the audit committee’s characteristics on earnings quality. A set of characteristics of the audit committee have been relied upon, perhaps the most important of which is the independence of the audit committee, its size, activities and experience, and its members ’ownership of the company's shares. The study was applied to a sample of companies in the countries of the Gulf Cooperation Council. The optional maturity variable was also relied upon to reflect the earnings quality in the sample under study. The study found the impact of the formation of the audit committee on the companies that make up the study sample for the countries of the Gulf Cooperation Council. Where the study found a positive impact on the earnings quality for the independence of the audit committee and the activities of the audit committee and the experience of the audit committee. There is also a positive impact on the audit committee members ’ownership of the company's shares, while there was a negative impact on the size of the audit committee. The study recommended the necessity of increasing the effectiveness of the audit committee in supervising the process of preparing financial reports and increasing the earnings quality.