Audit Committee Independence Research Articles

Effects of Audit Committee Practices on Service Delivery in Water and Sewerage Companies in Kenya

Prudent corporate governance requires an all-encompassing approach focused on democratic values, legitimate representation, and involvement while respecting and safeguarding the interests of all stakeholders. Corporate governance fosters successful organizations that impact society positively. A central concept in corporate governance is the effective execution of the oversight role, majorly accomplished through independent audit committees. Inconsistent or ambiguous audit scope often results in disputed financial reporting and audit processes, with boardroom wrangles that sometimes spill over to the performance of official tasks and the provision of services. The research aimed to answer the question “Does the presence of independent audit committees influence the quality of services provided by water and sewerage companies in Kenya?” Using a descriptive research design and stratified sampling approaches, the study sampled respondents from among management, employees, and customers. The research found that board diversity had a statistically positive effect on the quality of services, and audit committees held the management and staff accountable in their respective functional areas. The study concludes that audit committees should be sufficiently diversified for impartiality in exercising oversight on the firm; and recommends that management should uphold the audit committee’s resolutions to guarantee efficient financial reporting practices.

Pengaruh Independensi Komite Audit Dalam Memoderasi Karakteristik CEO Terhadap Kualitas Pelaporan Keuangan

This research aims to prove the influence of audit committee independence in moderating the CEO characteristics' impact on the quality of financial reporting in companies listed on the Indonesia Stock Exchange (IDX) during the period from 2018 to 2022. The sample used in this study consists of 1945 data points obtained through purposive sampling method. The research methodology employed is a quantitative approach utilizing statistical data, employing panel regression analysis, and processed using Eviews10 software. The research results indicate that audit committee independence is capable of moderating the relationship between CEO tenure and real earnings management, resulting in a negative coefficient on financial reporting quality. However, it is unable to moderate the relationship between CEO expertise and CEO ownership.

PERAN MEDIA COVERAGE ATAS PENGARUH CORPORATE GOVERNANCE DAN PENGUNGKAPAN MANAJEMEN RESIKO TERHADAP REAL EARNINGS MANAGEMENT

This study aims to examine the effect of corporate governance and risk management disclosure on real earnings management. In addition, this study also investigates the role played by the media (media coverage) and examines whether the media has an influence on real earnings management. The data analysis method in this study is a causality test using multiple regression analysis with moderation (Moderated Regression Analysis). The sample for this study used purposive sampling with a sample of consumer goods sector companies on the Indonesia Stock Exchange for the period 2019 – 2021. The results showed that independent commissioners and audit committees have a negative effect on real earnings management, disclosure of risk management and media coverage have no effect on real earnings management. Media coverage strengthens the influence of the Independent Commissioner on real earnings management, but does not strengthen the influence of the Audit Committee on real earnings management.

Good Corporate Governance dan Corporate Social Responsibility terhadap Kinerja Perusahaan dengan Gender Diversity sebagai Variabel Moderasi

This study aims to determine the effect of good corporate governance and corporate social responsibility oncompany performance with gender diversity as a moderating variable in the Basic and Chemical IndustrySectors listed on the Indonesia Stock Exchange for the 2020-2021 period. This study uses quantitative methodswith secondary data sourced from the company's annual report and sustainability report. The research sampleof 54 companies was selected using simple random sampling technique. The data analysis techniques usedinclude multiple linear regression analysis and moderation, as well as hypothesis testing. The results showedthat the independent board of commissioners (X1) had a significant positive effect on company performance,the audit committee (X2) had a significant negative effect on company performance. Meanwhile, managerialownership (X3) and corporate social responsibility (X4) have no effect on company performance. In addition,gender diversity (z) is able to moderate the effect of independent commissioners and audit committees oncompany performance and gender diversity (Z) is not able to moderate the effect of managerial ownership andcorporate social responsibility on company performance.

Pengaruh Komisaris Independen, Komite Audit dan Corporate Governance Terhadap Integritas Laporan Keuangan

This study aims to examine whether independent commissioners, audit committees, and corporate governance affect the integrity of financial reports in various industrial sector companies listed on the Indonesia Stock Exchange (IDX) in 2018 to 2020. The type of research conducted was quantitative research using the quantitative method. associative. The research sample was determined using a purposive sampling technique, so as to produce a sample of 41 companies with a total of 123 observational data. The analytical test used is descriptive statistical analysis test, panel data regression model selection, panel data regression model selection test, classical assumption test, panel data regression analysis and hypothesis testing. The results in this study were tested using the panel data regression model which aims to obtain an overall picture of the influence of independent commissioners, audit committees, and corporate governance on the integrity of financial statements. Overall the research results are presented in tabular form to make it easier to read and understand. The results of the study prove that independent commissioners, audit committees and corporate governance have proven to have a significant effect on the integrity of financial statements.

Corporate Governance and Financial Ratios of Manufacturing Companies on Financial Distress: The Main Board and Development Board of IDX

Financial distress is a condition where a company is unable to meet its obligations when they directed to bankruptcy. The purpose of this study was to analyze influence of corporate governance, profitability, liquidity, leverage and earning growth on financial distress. Research sample data used in this study were manufacturing companies listed on the main board and development board on the Indonesia Stock Exchange in 2016-2020. Logistic regression analysis had been applied to analyze data of study. The results show that the factors that influence Financial Distress in manufacturing companies on the main board and development board were different. For manufacturing companies on main board, influencing factors of financial distress were independent audit committee, liquidity, leverage, and earning growth. Meanwhile, board size, profitability, liquidity, leverage and earning growth were influencing factors of financial distress for manufacturing companies on development board.

Audit Committee Characteristics and Corporate Performance: Evidence from Listed Conglomerates in Nigeria

The corporate governance code mandates all publicly quoted firms in Nigeria to establish an audit committee to ensure transparency in financial reporting and protect shareholders' interests. This study examined the effect of audit characteristics on the corporate performance of listed conglomerates in Nigeria from 2015 to 2021. Audit characteristics was proxy as audit committee size, audit committee meetings and audit committee independence, while corporate performance was proxy as return on asset. The secondary data were sourced from the firms' annual reports and were analysed using correlation matrix and panel fixed regression. The result from the panel regression showed that audit committee size and independence do not significantly affect the performance of listed conglomerates in Nigeria. In contrast, audit committee meetings significantly but negatively affect listed conglomerates in Nigeria. This study concludes that the frequency of audit committee meetings does not increase the performance of firms. This study recommends that the Security and Exchange Commission ensure that conglomerate firms in Nigeria comply with at least four audit committee meetings in a year to improve monitoring mechanisms and corporate performance.

PENGARUH KEPEMILIKAN PENGENDALI, PROPORSI KOMISARIS INDEPENDEN, DAN KOMITE AUDIT TERHADAP AGRESIVITAS PAJAK DENGAN UKURAN PERUSAHAAN SEBAGAI PEMODERASI

This study aims to determine the effect of controlling ownership, the proportion of independent commissioners and audit committees on tax aggressiveness with company size as moderator. The method used in this research is quantitative. The population of this study are energy sector companies listed on the Indonesia Stock Exchange for the 2017-2021 period with a total of 37 companies and after following the sample criteria, there are 13 companies. The type of research used is quantitative research using Panel Data Regression and Moderated Regression Analysis (MRA) using Microsoft Excel and EVIEWS version 10. The data analysis technique used is Descriptive Statistical Analysis, Panel Data Regression Model Estimation, Classical Assumptions Test, Hypothesis Testing , and Moderating Regression Analysis (MRA) Test. Based on the results of the Coefficient of Determination Test (R2), the influence exerted by the independent variables on the dependent variable in this study was 3% and the remaining 97% was influenced by other variables not included in this study. The results of the T-Test show that Ownership of the Controller has no effect on Tax Aggressiveness, the Proportion of Independent Commissioners has no effect on Tax Aggressiveness, the Audit Committee has no effect on Tax Aggressiveness. The results of the Moderating Regression Analysis (MRA) test show that Company Size moderates Controlling Ownership of Tax Aggressiveness, Company Size cannot moderate the Proportion of Independent Commissioners on Tax Aggressiveness, Company Size can moderate the Audit Committee on Tax Aggressiveness
 

Board of Directors, Audit Committee and Firms’ Performance

This study explores the different attributes of audit committees and boards of directors' effect on firm performance. Mainly the board’s size and independence and the audit committee’s employment, size, independence, financial experience, and frequency of meetings. This paper also talks about resource dependency theory which considers that. Non-independent directors have a positive effect on firm performance. On the contrary, agency theory suggests that the more independent the board is, the better the performance. Many accounting scandals and worldwide failures in corporate governance have occurred in the past few decades, affecting stakeholders and taking a heavy toll on national and global economies. After many infamous corporates, the United States passed the Sarbanes-Oxley Act (SOX), which acted to heighten the responsibilities of the board of directors in corporations, promotes fairness to both shareholders and stakeholders alike by enforcing listed companies to employ independent, knowledgeable, and proactive audit committees and directors and ultimately set the utmost importance on the protection of investors and stakeholders.  Taking a sample of 96 companies, the results show that a more extensive and independent board positively affects business results, and the same applies to the implementation of an audit committee. However, our results found no link between the different characteristics of audit committees with firm performance. The findings above give us insight into how companies’ governance operates.

Pengujian Praktik Manajemen Laba Dengan Kualitas Audit Sebagai Variabel Pemoderasi

This study aims to obtain empirical evidence of the effect of the independence of commissioners and audit committees on earnings management and to test audit quality as a moderating variable can strengthen the relationship between the independence of commissioners and audit committees on earnings management or weaken the relationship between the independence of commissioners and audit committees on earnings management. Audit quality as a moderating variable, because high quality auditors strengthen supervision of management so that the profits reported in the financial statements are more transparant and free from misstatements. Manufacturing companies listed on the Indonesia Stock Exchange from 2017 to 2020 were used as samples and 94 companies were selected using purposive sampling method. This study uses path analysis to test the hypothesis. The results showed that the independence of commissioners and audit committees can reduce earnings management behavior by management. Supervisory activities by independent commissioners and audit committees are more effective in reducing opportunistic behavior by management, so that information can be more transparent and have higher quality. This study also provides results that higher audit quality can strengthen the relationship between audit committee independence and earnings management. This study provides information to investors and companies that to prevent earnings management, they can add commissioners and audit committee members from outside the company and also use qualified auditors in providing opinions.

Pengaruh Kualitas Auditor Internal dan Efektivitas Komite Audit terhadap Korupsi Di BUMN

This study aims at examining the effect of quality of internal auditors and the effectiveness of audit committees on corruption in State-Owned Enterprises (SOE). The quality of the internal auditors is proxied by the competence (experience, certification, training) and objectivity of the internal auditors. Meanwhile, the audit committee is proxied by size, independence, number of meetings, and expertise of the audit committee. The research method used is a quantitative method with the type of hypothesis testing research. The population of this study were state-owned enterprises listed on the Indonesia Stock Exchange (IDX) in 2016 - 2020. Sampling used purposive sampling and obtained a sample of 20 companies with a total of 100 observations over 5 years. This study uses secondary data obtained from the company's annual report. The internal auditor objectivity and audit committee independence were excluded from hypothesis testing, because they have constant values during the year of observation. Simultaneously the quality of internal auditors (experience, certification, training) and audit committee effectiveness (size, number of meetings, expertise) have a significant negative effect on corruption. Meanwhile, partially only the experience of internal auditors has a negative effect on corruption. Internal auditor certification, internal auditor training, audit committee size, number of audit committee meetings, and audit committee expertise have no effect on corruption.

Audit Committee Characteristics and Quality of Financial Statements of Listed Cement Companies In Nigeria

This study investigates the effect of audit committee characteristics on the quality of financial statements. The data was obtained from 3 listed cement companies from 2011 to 2022. The study employed multiple regression technique. The study found that Audit Committee Size (ACS) insignificantly increases earnings management thereby reducing the quality of financial statement (QFS), while Audit Committee Independence (ACI), Audit Committee Accounting Expertise (ACAE) and Audit Committee Gender Diversity (ACGD) insignificantly reduces earnings management thereby increasing the quality of financial statement (QFS). Since these effects are not statistically significant the study therefore, concludes that audit committee characteristics have no statistically significant effect on the quality of financial statement of listed cement manufacturing companies in Nigeria and further recommends that organizations should improve on the numbers of audit committee independent member, audit committee accounting expertise member and audit committee gender diversity as their presence tends to reduce earnings management.

APAKAH ELEMEN CORPORATE GOVERNANCE DAPAT MENGURANGI FINANCIAL DISTRESS PADA PERUSAHAAN BERISIKO TINGGI?

This study examine the role of Corporate governance (proxied by audit committee independence variables, institutional ownership, independent commissioners, board size) and enterprise risk management in predicting the emergence of corporate financial distress. The research design is quantitative. The research object or population studied is mining companies listed on the Indonesia Stock Exchange (IDX) during the period of 2016-2021. The method used for determining the research sample is purposive sampling, namely determining the sample from the existing population based on predetermined criteria obtaining research sample of 132 observations. All data sets are sourced from the Indonesia Stock Exchange website. This study is employing Panel Regression Analysis including descriptive statistics analysis, correlation, and hypothesis testing using the EViews 12 software. The result posits that institutional ownership has a significant positive effect on financial distress, while the independence of the audit committee, independent commissioners, board size, enterprise risk management do not have a significant impact on financial distress. Further, the control variable of this study, namely company size, has a significant negative effect on financial distress. This study is expected to have significant contribution to Mining enterprise’s stakeholder in examining prominent factors in predicting financial distress.

Does audit committee matter? Evidence from Tanzanian listed firms.

Aim: The primary role of audit committees is to provide oversight in the financial reporting, audit process, internal controls and in compliance with regulations and laws. The objective of this paper is to investigate the impact of board audit committees attributes on firm performance. Design/Research methods: Using a sample of firms publicly traded on the Dar es Salaam Stock Exchange (DSE) during 1998–2018; this paper estimated fixed effects regressions to tests the hypotheses developed. Conclusions/findings: The results show that audit committee attributes are positively linked with firm financial performance. Specifically, the findings reveal that audit committee attributes as measured by audit committee meetings, existence of audit committees, audit committee size and audit committee independence have positive impact on corporate performance as measured by return on sales (ROS) and profitability. These findings confirmed that firms having audit committees performed better than those without audit committees. Originality/value of the article: There is scarce research which examines the link between audit committees and firm performance in developing countries. To date, there is no study that has investigated the relationship between audit committee characteristics and firm performance in Tanzania. This paper provides new evidence on the relationship between audit committee attributes and firm performance in Tanzanian environment. Implications of the research: Overall, the findings recommend existence of large independent audit committees which conducts their meetings regularly as it is ideally enhances firm financial performance. Keywords: Audit committee attributes, corporate governance, firm performance, Tanzania JEL: G3, N27

Internal Audit Function and Financial Statement of Insurance Companies in Nigeria

The survival of any firm is predicated on the efficient functioning of the internal audit constituted by management for safeguarding of the company’s assets. It has been argued that several instances of doctored financial statements of quoted firms in Nigeria abound leading to scandals with dire consequences on investors’ confidence. The study examines the relationship existing between internal audit function and the financial performance of insurance companies in Nigeria. The study made a return on assets as a function of audit committee size, audit committee independence, audit committee financial expertise and firm size. The data culled from the financial statements of selected firms, National Insurance Commission Facts Books and the Nigerian Stock Exchange covers the period 2011-2020. Multiple regression techniques were used to explore the contemporaneous dynamics. The study finds evidence of a significant positive impact of audit committee size, audit committee independence and audit committee financial expertise on financial performance, contrary to the significant negative impact of firm size. Therefore, the paper recommended that the various elements of audit committee characteristics, which include audit committee size, independence, and financial expertise, should be strengthened to enhance financial performance in the insurance sector.

The Moderating Effect of the COVID-19 Pandemic on the Relation between Corporate Governance and Firm Performance

The present study aims to investigate the association between corporate governance mechanisms and financial performance among companies listed on the Tehran Stock Exchange (TSE). We also want to know if the COVID-19 global crisis moderates the relationship between them. The study sample consists of 1098 observations and 183 companies listed on the TSE from 2016 to 2021; furthermore, the statistical method used to test the hypotheses is panel data with random effects. In line with our expectations, the results show that the coronavirus pandemic worsened Iranian corporate performance. In support of agency theory, we figure out that board independence, board meeting frequency, and board financial expertise are correlated positively with firm value. In favor of resource dependency theory, this study finds robust evidence that audit committee size and independence have a positive effect on corporate performance. Most importantly, the positive linkage between board independence, board financial expertise, size, and independence of audit committee with firm performance was reversed during the COVID-19 pandemic, although the positive role of board meeting frequency in corporate profitability remained stable even during the COVID-19 outbreak. Furthermore, the outcomes indicate that CEO duality affects firms negatively, and this devastating effect became even stronger with the COVID-19 pandemic. Finally, we find that firms involved in mergers and acquisitions (M&A) managed to increase shareholders’ wealth using competitive advantage even during the pandemic.

Determinants Of Corporate Profit Management In Jakarta Islamic Index Mediated By Company Performance

Corporate earnings management is an essential issue in business entities. The fact reveals that users of financial statements are more focused on what is stated in the financial statements rather than how the profit process is obtained. This study analyzes and shows the factors influencing company earnings management in the Jakarta Islamic Index (JII) for the 2016-2020 period. Company performance is used as an intervening variable. This research uses a quantitative approach with secondary data in the form of panel data. The research population is all companies in the Jakarta Islamic Index (JII) for the 2016-2020 period, namely 30 companies. The sampling technique is purposive sampling, and 13 company samples were obtained. Data analysis technique using multiple linear regression and path analysis. The results showed that the independence of the audit committee, audit committee meetings, and company size positively and significantly affect earnings management. The audit committee size does not affect earnings management. Audit committee independence, audit committee size, and audit committee meeting do not affect company performance. Firm performance cannot mediate the effect of audit committee independence, size, and meetings on earnings management. This research can complement existing theory and be a reference for companies in improving performance and earnings management.

The effect of corporate governance on earnings management moderated by political connection

Research aims: This research aims to prove the effect of independent commissioner performance and audit committee expertise on earnings management to avoid earnings decreases and political connections to strengthen independent commissioner performance and audit committee expertise to limit earnings management.Design/Methodology/Approach: The population was manufacturing firms listed on Indonesian Stock Exchange during 2017-2020. The sampling technique used purposive sampling with a sample of 102 firms for four years or 408 observations. Then, hypothesis testing employed multiple regression analysis and hierarchical regression analysis.Research findings: The results showcased that accrual earnings management and abnormal discretionary expenses were used by managers to avoid decreases in earnings. On the other hand, corporate governance, like audit committee expertise, could be used to limit earnings management. While the political connection could strengthen and weaken the effect of independent commissioner performances in limiting earning management, political connections could not strengthen audit committee expertise in limiting real and accrual earnings management.Theoretical contribution/Originality: This research contributes to the political connection and earning management literature and provides empirical evidence of agency theory, positive accounting theory, prospect theory, and resource dependence theory.Practitioner/Policy implication: This research contributes to investors in determining investment decisions.Research limitation/Implication: The limitation of this research is that independent variables only used two components of corporate governance, i.e., the independent commissioner performances and audit committee expertise, so the level of influence of the independent variables on the dependent was small.

The Impact of Good Corporate Governance (GCG) on Manufacturing Financial Performance: Evidence of Listed Companies on the Stock Exchange (IDX)

The purpose: This research is to scrutinize the impact of the board of directors (BoD), the board of commissioners (BoC), the proportion of independent commissioners (PoIC), managerial ownership (MO), and the audit committee (AC) on the company's financial performance manufacturing financial performance from 2015 to 2019. The theoretical framework: Composition from several variables which are Board of Directors (BoD), Board of Commissioners(BoC), Proportion of Independent Commissioner(PoIC), Managerial Ownership (MO), and Audit Committee (AC). Design/Methodology/Approach: In this research, secondary data was used with a purposive sampling method to determine the number of samples. The number of samples obtained was 98 company data. Then, this study employed the multiple linear techniques. The tool utilized in this research were the Microsoft excel program and SPSS version 21. The Findings: research revealed that BoD, BoC, and MO variables significantly influenced the company's financial performance, whereas PoIC and AC did not significantly impact financial performance. Research, practical and social implications: This study attempted to highlight the impact of excellent corporate governance on company financial performance at (Indonesia stock exchange manufacturing listed companies) in latest years as well as to show things that can be done in improving the quality of the company by improving the financial performance of the company. Therefore, Originality/value: The value of the study every company is competing to improve the quality of the company to achieve its goals and be able to compete with other companies through the GCG is a rule of good governance for a firm between various participants by managing resources economically, productively, effectively, and efficiently to achieve the organization's goals.

Independent Audit Committee, Risk Management and Wealth Management in Banks

The different facets of risk management, personal finance, wealth management products, supervisory standards for bank governance, and risk governance are covered in this abstract. It emphasises the importance of these subjects in relation to the banking sector and the larger financial landscape. A key task performed by banks is risk management, which identifies, evaluates, and mitigates risks that could jeopardise the performance and stability of their finances. It requires the implementation of robust structures and procedures in order to preventively manage credit risk, market risk, operational risk, and liquidity risk. By successfully managing these risks, banks can increase their resiliency and ensure the preservation of stakeholders' interests. Budgeting, saving, investing, and retirement planning are all included in the management of a person's financial resources, which is referred to as personal finance. It places emphasis on the value of financial literacy and the necessity of making knowledgeable choices regarding one's own finances. The goal of personal finance is to give people the tools they need to fulfil their financial objectives, amass money, and safeguard their financial future. Specialised financial tools and services known as "wealth management products" are offered to institutional and high-net-worth clients. To maximise wealth creation and preservation, these solutions provide individualised investing methods, portfolio diversification, and risk management measures. To satisfy the specific needs and goals of their customers, wealth managers use a variety of investment vehicles, including stocks, bonds, alternative investments, and estate planning tools. In terms of bank governance, supervisory requirements relate to the rules and directives that are enforced by regulatory bodies to guarantee effective governance practises within banks. By strengthening banks' transparency, accountability, and risk management skills, these measures work to strengthen the financial system's stability and soundness. They cover topics like board makeup, risk management plans, internal checks, and compliance protocols. Establishing a solid framework and procedures for managing risks inside an organisation is what risk governance implies. It entails identifying one's risk tolerance, establishing risk management goals, and putting good risk management procedures into practise. Risk management makes sure that risks are properly recognised, evaluated, and tracked, and that the right mitigation techniques are in place. Additionally, it encourages accountability across the board and builds a culture that is risk-aware. whole, these sectors are crucial to the banking sector and have a significant impact on people, financial institutions, and the whole economy. Banks can successfully navigate the complexities of the financial landscape, mitigate risks, and generate long-term value for all stakeholders by implementing strong risk management practises, providing comprehensive personal finance solutions, creating tailored wealth management products, adhering to supervisory requirements, and establishing effective risk governance frameworks