Audit committee and impression management in financial annual reports: evidence from Jordan

The study examined the impact of the audit committee on the timeliness of the annual financial reports in Jordanian companies listed in the Amman Stock Exchange. The study used correlational research design. The data which collected from the published annual financial reports of 172 companies listed in Jordan for the duration between 2014 and 2016. The result showed that there is a positive and significant relationship between audit committee (audit committee independence, audit committee meeting and audit committee size) and timeliness of financial reports. In addition, there is a positive role for the audit committee to oversee the preparation and publication of financial reports. The study hereby recommend that companies to disclose the annual financial reports in legal time as this has become necessary in view of their impact on investor decisions. And continue to study this type of research for other financial periods.

The study examined the impact of the audit committee on the timeliness of the annual financial reports in Jordanian companies listed in the Amman Stock Exchange. The study used correlational research design. The data which collected from the published annual financial reports of 172 companies listed in Jordan for the duration between 2014 and 2016. The result showed that there is a positive and significant relationship between audit committee (audit committee independence, audit committee meeting and audit committee size) and timeliness of financial reports. In addition, there is a positive role for the audit committee to oversee the preparation and publication of financial reports. The study hereby recommend that companies to disclose the annual financial reports in legal time as this has become necessary in view of their impact on investor decisions. And continue to study this type of research for other financial periods.

Currently, the Jordanian economy needs more investment due to the growing financial deficit facing the Jordanian state. Therefore, this study came to increase investors' trust in financial reports issued by Jordanian companies to attract more investments. Based on that, this study will investigate the impact of audit committee dimensions on the efficiency of financial reports of limited partnership companies listed on the Amman Stock Exchange. The data were collected from financial reports issued by 52 limited partnership companies for the year 2021. The study used multiple regression to test the hypotheses. Based on the findings, audit committee dimensions explained the variation in financial reports' efficiency which reached 0.629. The audit committee members' size does not significantly affect the financial reports' efficiency. The significance reached 0.287. However, the knowledge of financial management has a significant positive effect on financial report efficiency; the significance reached 0.000 and the effect volume arrived at 0.699. Also, the findings showed that audit committee meetings have a greater effect on financial reporting efficiency than financial management knowledge. The impact was significantly positive, arriving at 0.790, while the significance reached 0.000. The main research conclusion is that limited partnership companies listed on the Amman Stock Exchange adopt corporate governance to achieve control effectiveness of audit committees to increase financial reporting efficiency to achieve more investments. AcknowledgmentThe publication of this research has been supported by the Deanship of Scientific Research and Graduate Studies at Philadelphia University – Jordan.

The board of directors is an elite group that faces multifaceted tasks. The board needs to implement decisions on a wide variety of subject matter. These decisions are often delegated to specialized sub-committees within the board. The different objectives of each sub-committee can result in conflicting interests leading to decisions that are sub-optimal. For example, at times, the objectives of the compensation and the audit committee are not aligned. The objective of compensation committees is to grant CEOs compensation packages reflective of their performance. Yet, these compensation packages might contain incentives that could motivate CEOs to influence the financial reporting process in order to reflect better performance, increasing the risk of poor quality financials. In contrast, the objective of audit committees is to oversee the quality of the financial reports and the process that leads to them. Therefore, they would favor compensation packages that reduce the risk of earnings manipulation. We examine public companies that have overlapping compensation and audit committee members and find a higher proportion of CEO incentive compensation in companies with less overlap among audit and compensation committee members. These results suggest that separating the members within these committees might contribute to the effectiveness of board decisions.

Audit committees play a critical role in governance as financial disclosures are scrutinised. This study examines the effects of audit committees on the quality of financial reporting among Vietnamese listed firms, as well as how the efficacy and features of audit committees affect the accuracy, dependability, and transparency of financial reports. The study uses Partial Least Squares Structural Equation Modeling (SmartPLS) to analyse the association between audit committee features and financial report quality using a sample of 259 listed Vietnamese businesses across different industries. This approach was selected due to its capacity to manage complex systems and yield reliable outcomes. The results indicate that better financial report quality is correlated with more substantial audit committee features. In particular, it is thought that maintaining financial reporting accuracy depends heavily on audit committee members’ independence and financial knowledge. Furthermore, audit committee activity, including the frequency of meetings and thoroughness of reviews, enhanced financial reporting transparency significantly. These findings suggest that companies prioritizing robust audit committee structures may experience improved investor confidence and compliance with international reporting standards. This study adds to the expanding body of literature on financial reporting standards and corporate governance, focusing on the context of emerging economies such as Vietnam.

The aim of the project was to investigate corporate governance practices in UK higher education institutions (HEIs). Specifically, the project sought to examine the role and effectiveness of the audit committee in supporting what was initially conceptualised as financial leadership’ in HEIs. What makes a board, and its various committees, an effective mechanism is a key and recurring question, which has been raised in academic, practitioner and policymaking circles and is relevant to companies, public bodies, charities and universities alike. The case of the audit committee is often highlighted in practice and in the literature, since it is a central plank of any corporate governance structure, normally tasked with overseeing the financial, control, auditing and risk management aspects of the organisation. In the light of the rapidly changing and uncertain financial environment faced by UK HEIs, the role of the audit committee is critical in monitoring, advising and shaping the HEI’s direction, and its work and structure have been the subject of detailed guidance by the Committee of University Chairs (CUC), supplemented by developmental resources from the Leadership Foundation for Higher Education and accountancy firms. However, what has been missing so far is a comprehensive cross-sectional analysis of the audit committee’s actual structure and characteristics in UK HEIs and the impact this has on organisational outcomes, and a deeper understanding of the role and activities of the audit committee from the field. In terms of the practical direction adopted during the research and how the results are presented in the final report, this has cascaded into three sub-objectives that we have fully achieved; ie, to: (a) investigate the characteristics of the audit committee in UK HEIs (b) investigate HEIs’ level of public accountability and the likely impact of the audit committee on accountability and other organisational outcomes (c) explore the role and effectiveness of the audit committee in detail.

SUMMARY Despite SOX enhancing the requirements of audit committee (AC) members, AC members are perceived to be inactively involved or lacking timely information about accounting issues. However, when lead independent directors (LIDs) serve on ACs, they bring the ability to ensure timely sharing of and improved awareness of accounting issues among the AC members, the external auditor, and managers, strengthening AC effectiveness. When considering the broad cross-section of companies with LIDs on the AC, we find that they produce more reliable and timely financial information, especially companies with large ACs or whose CEO tenure is short. However, examining subsamples of companies with/without CEO duality, the effect differs for individual companies, suggesting weaker results when there is CEO duality and benefits of having LIDs on other committees. A path analysis suggests that LIDs on the AC lead to a lower likelihood of CEO-forced turnover because of their favorable influence on financial reporting. Data Availability: All the data used in this paper, including financial statements, annual reports, and regulatory filings, are sourced from publicly available financial databases and regulatory filings. JEL Classifications: G30; M41; M42.

CEO Characteristics and Timeliness of Financial Reporting of Vietnamese Listed Companies

The audit committee is one of the corporate governance mechanisms vested with the responsibility of monitoring the financial reporting process of corporations. This paper examines the impact of audit committee attributes of expertize, meeting frequency, independence, attendance and size on financial reporting quality of deposit money banks in Nigeria. Top ten banks based on asset capitalization were sampled during the period 2008-2017. Data was extracted from their annual report and analysed using pooled OLS regression and the Fixed effect test. Firm age and firm size were introduced as control variables in the regression model. The result of the analysis shows that audit committee attributes of attendance and independence has negative and statistically insignificant impact on financial reporting quality of deposit money banks in Nigeria while audit committee attributes of size and meeting frequency has positive and statistically insignificant influence on financial reporting quality. However only audit committee attribute of expertise seems to be positive and statistically significant at influencing financial reporting quality of deposit money banks in Nigeria. Firm age and size were also found to be positive and statistically significant at influencing financial reporting quality of deposit money banks in Nigeria. The paper recommends among others that regulatory bodies like the Financial Reporting Council of Nigeria (FRCN) and the Central bank of Nigeria being the apex bank should make it a policy for banks to ensure that appointment of members of the audit committee is based on expertise that is, members of the committee must possess relevant knowledge in accounting and belong to a professional body of accounting. Keywords: Audit committee, Expertise, Attendance, Meeting frequency, Independence, Size, Financial Reporting Quality. DOI : 10.7176/RJFA/10-4-04

The role of the audit committee in oversight of the internal control and internal audit function has grown in the last decades as corporate governance mechanisms after the dramatic scandals and failures. This paper examines the impact of the audit committee and the presence of internal audit function on a company's financial reporting quality. Moreover, this study focus on the association between the audit committee and internal audit function and company's financial reporting quality measured as accruals quality and absolute discretionary accruals. It is hypothesized that the financial reporting quality is related to the strength of internal corporate governance mechanisms, including audit committee and internal audit and its association. Different mechanisms are being examined: audit committee size and independence, frequency of meeting, financial literacy, existence of internal audit function and its meeting independently. To test our hypothesis, we employ panel data analysis for 71 nonfinancial firms through 139 observations listed on the Muscat Securities Market during the period of 2013 and 2014. The data used in the analysis were collected from the companies' annual reports published by the Muscat Securities Market. Ordinary least squares is used to regress financial reporting quality linear variables on audit committee and internal audit. The findings suggest that audit committee meetings frequency and the presence of internal audit function positively affect a company's financial reporting quality. Hence, an audit committee that meets more frequently provides effective monitoring of financial reporting and increases the likelihood of discussing and following up any problems and findings in the financial statements and audit reports. Thus, frequent audit committee meetings provide better oversight of the annual accounts. Likewise, the internal audit function is considered an important corporate governance mechanism to safeguard the quality of financial reporting by monitoring organizational risks, assessing internal controls and detecting possible manipulation because the internal auditor evaluates financial procedures. However, results suggest that the relationship between other corporate governance mechanisms and financial reporting quality is not significant.

This study examines the role of the audit committee on audit report lag. The sample in this study was taken from all companies listed on the Indonesia Stock Exchange. The sample selection method using the purposive sampling method. By using multiple regression analysis techniques, it is found that the competence of the audit committee, number of members of the audit committee has a negative effect on the audit report lag. The higher the intensity of the audit committee meeting, the earlier financial reporting supervision occurs. High quality of financial reporting makes the audit period of the financial report audit shorter. The independence of the audit committee does not appear to affects the audit report lag. This is because the object of the examination of the financial statements itself is the annual report. On the other hand, the gender of the female audit committee has a negative effect on the audit report lag. The existence of female gender in the composition of the audit committee plays an important role in shortening the period for completion of audits by independent auditors.Penelitian ini mengkaji tentang peran komite audit terhadap audit report lag. Sampel dalam penelitian ini diambil dari seluruh perusahaan yang terdaftar di Bursa Efek Indonesia. Metode pemilihan sampel menggunakan metode purposive sampling. Dengan menggunakan teknik analisis regresi berganda diketahui bahwa kompetensi komite audit, jumlah anggota komite audit berpengaruh negatif terhadap audit report lag. Semakin tinggi intensitas rapat komite audit, maka semakin dini pengawasan pelaporan keuangan terjadi. Kualitas pelaporan keuangan yang tinggi membuat periode audit laporan keuangan menjadi lebih singkat. Independensi komite audit tampaknya tidak mempengaruhi audit report lag. Hal ini dikarenakan objek pemeriksaan laporan keuangan itu sendiri adalah laporan tahunan. Di sisi lain, jenis kelamin komite audit perempuan memiliki pengaruh negatif terhadap lag laporan audit. Keberadaan gender perempuan dalam komposisi komite audit berperan penting dalam mempersingkat jangka waktu penyelesaian audit oleh auditor independen.

In recent times the world's business community has seen an overwhelming surge of serious corporate governance and financial reporting scandals in both the private and the public sectors. These governance collapses happened despite the fact that the majority of these companies have audit committees. This article critically examines the provisions of the Companies Act 71 of 2008 relating to the establishment and maintenance of audit committees in South African companies. The focus is particularly on the policy rationale, and the role and contribution of audit committees towards financial reporting in South Africa. The purpose is to demonstrate that audit committees play a key role in the production of dependable financial statements and reports for the benefit of the company's stakeholder community. This article highlights the relationship between the effectiveness of audit committees and good corporate governance, as well as accurate financial reporting. In other words, where there is a more effective audit committee, there is a high likelihood of accurate and dependable financial statements and other financial reports.

Non-profit organization (school) financial reports prepared based on PSAK No. 45 provides information about the resources provided by the resource provider and can also be used as a consideration for decision making. If a non-profit organization does not present financial reports that comply with standards, it will reduce the trust of resource providers in providing resources to a non-profit organization. The purpose of this research is to find out whether the financial reports presented by the Belawan Christian Private Middle School show accountability and transparency as well as planning and administration in accordance with PSAK No. 45. The type of data used in this research is qualitative data which describes a brief history, organizational structure, vision and mission. This research uses secondary and primary data sources, namely data obtained from the field and other sources. The data collection methods used in this research are documentation and interviews. The data analysis technique used in this research is a descriptive method, which is done by interpreting the data obtained so as to provide an overview of the problems faced. The results of this research indicate that the financial reports at the Belawan Christian Private Middle School cannot reflect accountability and transparency in accordance with PSAK No. 45, In presenting financial reports, the Belawan Christian Private Middle School presents monthly financial reports and there are no annual financial reports, resulting in inadequate information. Based on PSAK No. 45 regulations, non-profit entity financial reports should be presented annually, financial reports in accordance with PSAK No. 45. 45, namely Financial Position Report, Activity Report, Cash Flow Report, and Notes to Financial Reports.Keyword: Akuntability, Financial Report, Junior High School, Christian, Belawan

PurposeThis study aimed at investigating the impact of some financial indicators (salary competitiveness, employee productivity, company performance and company size), disclosed in the annual financial reports, on employee turnover in Jordanian pharmaceutical companies listed on the Amman Stock Exchange (ASE).Design/methodology/approachA longitudinal design with cross-sectional time-series (panel) data from annual financial reports of six Jordanian pharmaceutical companies, listed on the ASE for the period 2009–2018, was used to measure employees’ turnover and its precedents quantitively. The panel data of 160 observations (six companies with ten-time periods) were analyzed using STATA 15.0 to achieve study objectives.FindingsContrary to what is expected, the results showed that salary competitiveness does not affect employee turnover, and employee productivity positively affects employee turnover. In contrast, the results of this study supported the widespread belief that company performance and size negatively affect employee turnover.Research limitations/implicationsThis study does not address voluntary and mandatory turnover because it is very difficult to distinguish the two types based on financial reports. Also, other important variables (medical expenses, training expenses, etc.), which can affect employee turnover are not disclosed in the financial reports of all pharmaceutical companies due to the lack of uniform financial reporting standards.Practical implicationsPharmaceutical companies should not focus on salaries to attract and retain employees but rather provide them with a distinct set of other benefits including salaries. Also, it should try to reduce the workload of employees by increasing their number to the extent that it does not constitute an additional burden on other employees.Originality/valueThis is the first attempt, according to a literature review, to measure employee turnover and its antecedents based on financial indicators disclosed in the pharmaceutical companies’ annual financial reports.

In this paper, we examine how the Boards of Directors affect their firm's financial reporting quality (FRQ) through the appointment of new Audit Committee Members (ACM) with a sample of firms from the period 2007 to 2011. Using the appointee firm's financial report quality as a proxy for new ACMs’ financial reporting attributes, we find that appointer firms are more likely to appoint new ACMs with financial reporting attributes similar to firms’ FRQ. We also show that firms appointing ACMs with relatively weak financial reporting attributes are more likely to have decreased subsequent FRQ. Further, we find that firms appointing ACMs with relatively weak financial reporting attributes suffer more deterioration on their subsequent FRQ when their financial reporting qualities are more different from the ACMs’ financial reporting attributes. For the appointment of board members not on the Audit Committee, we find no similarity of financial reporting quality between appointer firms and new directors.