AUDIT COMMITTEE EFFECTIVENESS TOWARDS QUALITY OF FINANCIAL REPORTING OF COOPERATIVES IN NORTHERN PHILIPPINES

Abstract

This study explores the factors influencing effectiveness of audit committee that improve quality of financial reporting and eventually enhance good cooperative governance. The target population was the duly registered cooperatives in Ifugao province in Northern Luzon, Philippines. The findings from both correlation and regression analysis revealed that audit committee independence, audit committee financial competence and audit committee meetings had statistically significant relationship with the quality of financial reporting. From the findings, the study concluded that members of audit committee of cooperatives must have high level of independence, financially competent and hold quality meetings to enhance the quality of their financial reporting. The current study may have provided some useful insights into the importance of audit committee effectiveness towards quality of financial reporting in the context of cooperatives in Ifugao, Philippines but there are some limitations. Firstly, the generalization of the results focused on cooperatives in Ifugao province. Hence, expanding the reach for cooperatives or other organizations will also enhance and provide a comprehensive data. Secondly, the data was confined to only a few variables. Thus, it would be interesting to incorporate audit committee honorarium, audit committee transparency and cultural influence as other variables for future studies on audit committee attributes and quality of financial reporting. Keywords: Audit Committee Effectiveness, Cooperatives, Good Governance and Quality of Financial Reporting.