Abstract
We examine the association between audit-committee expertise and asymmetric information in the U.S. equity market. Using precise private information extracted from a decomposed bid-ask spread, we find that the existence of an audit committee with financial expertise is negatively associated with information asymmetry. We further find CEO duality to mediate the association between audit-committee financial expertise and information asymmetry. More specifically, we document a significant positive association between the interaction term of CEO duality and audit-committee financial expertise and information asymmetry. Our results are robust to several market-microstructure measures of asymmetric information (e.g., quoted spread, effective spread, price impact, the probability of informed trading), firm-specific characteristics, and market-liquidity measures.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
