Audit Committee Research Articles

The Influence of Good Corporate Governance on Financial Performance in Indonesian Islamic Banking

This study examines the impact of Good Corporate Governance (GCG) on the financial performance of Sharia banking in Indonesia Tbk. Analyzed GCG variables include the Board of Commissioners, Board of Directors, Independent Commissioners, Sharia Supervisory Board, and Audit Committee. Using a quantitative method with multiple linear regression analysis, the study employs secondary data from annual reports of Sharia banking in Indonesia Tbk. Normality tests were conducted using the One-Sample Kolmogorov-Smirnov test, while heteroscedasticity tests were performed using a scatterplot of residuals against standardized predicted values.Results indicate that none of the independent variables significantly impact financial performance, with p-values well above 0.05. Additionally, the F-test (ANOVA) shows that the independent variables collectively do not significantly impact financial performance, with an F value of 0.243 and a p-value of 0.939. The very low coefficient of determination (R²) of 0.048 suggests that the regression model explains only 4.8% of the variation in financial performance.The implementation of GCG principles at Bank Muamalat Syariah Tbk has not effectively improved financial performance. Therefore, evaluation and improvement of GCG implementation are needed, along with consideration of other factors potentially influencing financial performance. Recommended measures include enhancing the capacity of the Board of Commissioners and Board of Directors, optimizing the role of Independent Commissioners, and increasing the effectiveness of the Sharia Supervisory Board and Audit Committee to improve the bank's financial performance.

How Corporate Governance Practices Influence the CSR in the Non-financial Sector of Pakistan An Empirical Study of Pakistan Stock Exchange

In the course of this research the variables such as Women Directors, Board Size, Board Independences, Ownership structure and Audit committee are taken into consideration and how these factors influence Corporate Social Responsibility (CSR) disclosures. The analysis is based on data taken from the Pakistan Stock Exchange (PSX) for the period 2010-17. The analysis technique such as Fixed Effect Regression model is used which is based on Hausman diagnostic test results. Where the result reflects a positive significant effect of AUDIT, BIND and WDIR on CSR disclosure, however the relationship between BS and OWN on CSR disclosure has not been established. Control Variables such as Profitability (PRFT), Firm Size (FS) and Leverage (LEV) are investigated in this study. Using fixed effect model correlation matrix, regression analysis and descriptive statistics are examined. Considering the non-financial sectors of Pakistan, the study determines that AUDIT, BIND and WDIR plays pivotal role while promoting CSR related activities. Furthermore, the insights gained from the present study explored the importance of Corporate Governance (CG) strategies to promote CSR, the outcome of the study can be a helping hand for the policy makers and corporate decision makers while devising effective governance strategies. The control variables such as FS, PRFT and LEV provide depth of understanding regarding the factors influencing CSR disclosure. In a broad sense, the current research enhances the scholarly discourse on CSR disclosure. The findings of the study give a roadmap for future research studies to fill the identified gaps and further improve CSR disclosure practices in non-financial sector of Pakistan.

Relationship between the composition of the audit committee and earnings quality in Tier One banks in Nairobi City County, Kenya.

This study investigates the relationship between audit committee composition and earnings quality in Tier One banks in Nairobi City County, Kenya. The composition of audit committees, particularly the presence of independent directors, financial experts, and industry experts, is hypothesized to significantly influence the quality of reported earnings. Using a sample of six Tier One banks over the period 2016-2021, this study employs a correlational research design to examine this relationship. Data was collected through questionnaires administered to 90 respondents across operational, middle, and lower management levels, with a response rate of 67%. The study utilized descriptive statistics, correlation analysis, and multiple regression analysis to analyze the data. Key findings indicate a positive and statistically significant relationship between audit committee composition and earnings quality. Specifically, the presence of independent directors (r = 0.38, p < 0.05), financial experts (r = 0.29, p < 0.05), and industry experts (r = 0.26, p < 0.05) on the audit committee were all positively correlated with measures of earnings quality. The regression analysis further confirmed these relationships, controlling for other audit committee characteristics such as size and meeting frequency. These findings suggest that the composition of audit committees plays a crucial role in enhancing the quality of financial reporting in Tier One banks in Kenya. The study recommends that regulatory bodies and bank management prioritize the appointment of independent directors with relevant financial and industry expertise to audit committees. This research contributes to the existing literature on corporate governance in the banking sector and provides practical implications for improving financial reporting quality in emerging markets.

Reconditioning For Discharge; An OT-Led Initiative

Abstract Background Deconditioning is the loss of functional ability in frail older adults (BGS, 2017). Many initiatives such as #EndPJParalysis address the importance of preventing functional decline in acute settings. Occupational therapists (OTs) are best equipped to lead these initiatives due to the holistic nature of the profession. This initiative aimed to complete an educational campaign among staff, patients and families about the importance of preventing deconditioning. Audit approval was granted by hospital Clinical Audit Committee. Methods An observational audit of patient presentation at ward level was completed. Data was gathered on clothing and sitting out status as a baseline measurement. A PR and staff education campaign was instigated. Information leaflets and posters for patients, families and staff were distributed. A re-audit was completed after 1 month. Results Patients in their own clothing/pyjamas increased by 8%. Patients sitting out of bed increased by 11%. Informal positive feedback from patients, families and staff suggested a cultural shift on the ward with regards to promoting patients independence. Conclusion Improvements post initiative were noted, however, a longer duration of the initiative would be beneficial to further promote reconditioning. OTs’ comprehensive approach is best placed to champion this reconditioning initiative. Further roll out of the campaign throughout the hospital may be of benefit. There is a wealth of educational/PR resources available for same. Reference British Geriatrics Society (2017) Deconditioning awareness, British Geriatrics Society. Available at: https://www.bgs.org.uk/resources/deconditioning-awareness (Accessed: 19 April 2024).

Enhancing Discharge Letter Completeness: Consultant Review via Encrypted Medical App

Abstract Background Ensuring comprehensive discharge letters is crucial for safe transitions from acute hospitals to community care. The 2013 National Standard for Patient Discharge Summary Information of the Health Information and Quality Authority (HIQA) 2013 outlines what items of information ought to be included in discharge summaries. On the wards, junior doctors often complete discharge documentation without consultant review. With technological advancements, tools like encrypted chat apps for medical care offer potential solution to improve communication and access to specialized reviews. We aimed to evaluate whether a specific app to access Consultant review could enhance discharge letter completeness. Methods We conducted a retrospective audit of discharge letters for inpatients admitted and discharged under a geriatric team between September 1st and December 23rd, 2023. The letters were divided in two groups: intervention, reviewed by a medical consultant, and control, including letters only signed off by non-consultant hospital doctors. Data access and approval were obtained from the hospital's Clinical Audit Committee; data collection utilized hospital information systems and Excel database, with minimal demographic data collected. SPSS facilitated data analysis. Each discharge letter was assessed for various items outlined in the HIQA guideline. The prevalence of inclusion of each item in each group was compared using non-paired Student t-test. Results We analysed 89 discharge letters, with 34 (38.2%) in the intervention group and 55 (61.7%) in the control group. Although most items showed no statistically significant difference between groups, the inclusion of investigation results significantly differed (91% in the intervention group versus 23% in the control group). Conclusion Our audit observed improved completeness of inclusion of investigation results in the intervention group. Future research should involve a larger sample from various teams to assess whether access to senior letter review via an encrypted app can consistently enhance discharge letter completeness.

Determinants of Risk Management Disclosure Study of Banking Sub-Sector Companies Listed on the Indonesia Stock Exchange

This research aims to analyze how risk management disclosure is seen from the implementation of corporate governance (institutional ownership, audit committee, independent commissioner) and company size, which is the main issue of this article, which business actors hope can mitigate business risks. The population of this research is banking industry companies listed on the Indonesia Stock Exchange for the 2018-2020 period. The research sampling technique that the researcher used was purposive sampling. The analysis technique that researchers use is multiple regression analysis and descriptive statistics. The data analysis that researchers used was with the help of the SPSS version 26 application. The results of this research simultaneously show that company size, audit committee, independent commissioner and institutional ownership jointly influence risk management disclosure. Partially, company size has an effect and is not significant on risk management disclosure, the audit committee has a significant effect on risk management disclosure. independent commissioners have an inversely proportional effect on risk management disclosures, there is an influence of institutional ownership which is not significant and inversely proportional to risk management disclosures

The Effect of Independent Commissioners, Audit Committee Competence, and Firm Size on the Degree of Sustainability Report and its Effect on Enterprise Value

The aim of this study is to examine the impact of independent commissioners, audit committee expertise, and business size on the scope of sustainability reports and their relationship to the firm's value. The sample of publicly traded companies that are listed on the Indonesia Stock Exchange between 2016 and 2020 is the main subject of the study. Using a purposive selection approach, 40 organizations in total were chosen as research samples. With the use of the Eviews Version 12 program, panel data regression analysis is used in this study. This study demonstrates that the presence of independent commissioners and the degree of competency of the audit committee do not have a substantial impact on the extent of Sustainability Report and the value of the business. The size of the business has no significant influence on the amount of Sustainability Report , but it does have a big effect on the value of the firm. The research findings indicate that the amount of Sustainability Report does not have a moderating influence on the relationship between independent commissioners, audit committee competency, business size, and firm value.

Pengaruh Independensi Dan Gender Komite Audit Terhadap Audit Delay

The influence of audit committee independence and gender on audit delay is the subject of this research. This research was conducted using a quantitative approach combined with a descriptive approach. For this research, the data used was secondary data and the sampling technique used was purposive sampling. This research examines 33 banking companies over a period of 4 (four) years. The results of this research are that independence has a negative effect on audit delay and audit committee gender has a negative effect on audit delay. Therefore, it can be concluded that if the company has an audit committee that is independent then this can reduce the occurrence of audit delays and if the company has more female audit committees then this can reduce the occurrence of audit delays.This research aims to determine the influence of audit committee independence and gender on audit delay.

Assessing The Influence of Board of Commissioners, Audit Committees, and Company Scale on Business Performance

Assessing The Influence of Board of Commissioners, Audit Committees, and Company Scale on Business Performance

Dinamika Kinerja Lingkungan dan Implikasinya Terhadap Pelaporan Keberlanjutan di Indonesia

The objective of this study is to determine the impact of environmental performance on the sustainability reporting of companies in Indonesia, utilizing the PROPER scale as a measurement tool. This research examines whether there is an improvement in sustainability report disclosures associated with the environmental performance assessed through the PROPER scale. The study involves companies listed on the Indonesia Stock Exchange that have published annual and sustainability reports for five consecutive years. The analytical method employed is WarpPLS, with a total of 85 observations. WarpPLS is used to identify statistical relationships between environmental performance and the intensity of sustainability reporting. The findings indicate that there is an enhancement in sustainability report disclosures when the audit committee and board of directors hold regular meetings. Companies without governance committees tend to focus more on governance improvement rather than on disclosing sustainability reports. Good environmental performance, particularly in companies with specific industry types and the presence of governance committees, enhances sustainability reporting. However, companies with strong environmental performance tend to make the audit committee and board of directors focus on other responsibilities, given that the community already understands that these companies manage their environmental impact well. This study underscores the importance of the Indonesian government's support in encouraging, facilitating, and urging companies to achieve the gold category in the PROPER scale. This not only demonstrates good environmental performance but also enhances sustainability report disclosures. This research implies that good environmental performance should be accompanied by increased transparency in sustainability reporting to truly contribute to sustainable development.

The Role of Company Age in Moderating the Effect of Political Connections, Audit Committees and Institutional Ownership on the Quality of Financial Reports

This study aims to determine the effect of Political Connections, Audit Committees and Institutional Ownership on the Quality of Financial Reports with Company Age as a moderating variable. Research is an exploratory study conducted to find out and explain more deeply and holistically the characteristics of the variables studied in a situation. The sample used in this study was the LQ45 companies listed on the Indonesia Stock Exchange for the period 2020-2022, while the technical data analysis used in this study was Panel Data Regression and Moderated Regression Analysis. The results of the study provide empirical evidence that Political Connections do not affect the Quality of Financial Reports, the Audit Committee affects the Quality of Financial Reports, Institutional Ownership affects the Quality of Financial Reports, Company Age moderation can strengthen the influence of Political Connections on the Quality of Financial Reports, Company Age moderation can strengthen the influence of the Audit Committee on the Quality of Financial Reports, Company Age moderation can weaken the influence of Institutional Ownership on the Quality of Financial Reports.

Internal Control and Firms’ Financial Performance in Nigeria: A Study of Selected Manufacturing Firms

This study was carried out for the purpose of understanding the impact of internal control on firm performance. This research wanted to prove that internal control played an important role on the performance of ten selected manufacturing firm in Nigeria. Internal control factors like board size, audit committee size, and board independence were investigated to see how they impact performance. Secondary data gotten from the ten manufacturing firms’ financial statement were analyzed using the panel data regression analysis. Although the fixed effect and the random effect regression were carried out, the Hausman test pointed to the fixed effect regression as significant, hence it was focused on. Findings from the fixed effect revealed that board size, audit committee size, and board independence were all significant in impacting firm performance measured by equity returns. The study therefore recommended among others that the Board of directors should be more diverse in the composition of board members as this would boost their independence.

PENGARUH KOMITE AUDIT, UKURAN PERUSAHAAN DAN FEE AUDIT TERHADAP KUALITAS AUDIT PADA PERUSAHAAN SUB SEKTOR FOOD AND BEVERAGE YANG TERDAFTAR PADA BURSA EFEK INDONESIA TAHUN 2017-2022

This research aims to find out and provide empirical evidence regarding the influence of the audit committee, company size and audit fees on audit quality. The population in this research is manufacturing companies operating in the Food and Beverage Sub Sector Companies Listed on the Indonesian Stock Exchange 2017-2022. the influence is partial or simultaneous. This research uses a quantitative approach and uses associative methods. The samples used were 10 samples of companies which used secondary data obtained from the Company's Financial Reports. The method used is statistical testing which includes logistic regression testing, hypothesis testing and coefficient of determination. The research results show that the audit committee partially has no effect on audit quality using the eviews version 9 and Microsoft Excel applications. The research results show that partially the audit committee has no effect on audit quality, partially company size has no effect on audit quality, partially audit fees have an effect on audit quality, simultaneously, audit committee, company size and audit fees have an effect on audit quality

PENGARUH TATA KELOLA PERUSAHAAN, KUALITAS TANGGUNG JAWAB SOSIAL DAN KINERJA KEUANGAN TERHADAP PENGHINDARAN PAJAK

This study aims to determine the influence of corporate governance, social responsibility and financial performance on tax avoidance. The population in this study is Manufacturing Companies in the consumer goods industry sector listed on the Indonesia Stock Exchange for the 2019-2023 period. In this study, the data used is secondary data, the sample was selected using the method Purposive Sampling and produced as many as 31 samples. Data analysis in the study used multiple regression analysis using e-views software version 10. The results of the study show that independent commissioners do not have a significant effect on tax avoidance, the audit committee has a significant effect on tax avoidance, corporate social responsibility does not have a significant effect on tax avoidance, financial performance has a significant effect on tax avoidance, and governance, social responsibility and financial performance simultaneously affect tax avoidance.

Impact of The Corporate Governance on Sustainability Report Disclosure with Environmental Performance as A Moderation Variable in Indonesia

This study aims to analyze the effect of corporate governance on sustainability report disclosure, with environmental performance acting as a moderating variable. The analysis focuses on the role of the board of directors, independent commissioners, audit committees, and financial performance in influencing the quality of sustainability reporting, particularly within the Indonesian context. Environmental performance is measured using the PROPER scale. The study utilizes data from the annual and sustainability reports of 20 companies in the basic materials and energy mining sectors listed on the Indonesia Stock Exchange from 2018 to 2022, amounting to 100 observations. The data is processed using SPSS 23. The results show that the presence of female directors significantly enhances the quality of sustainability disclosures, as they tend to prioritize social responsibility. Moreover, financial performance, as measured by Return on Assets (ROA), positively affects sustainability reporting, with companies in better financial health being more transparent in their disclosures. Environmental performance, when combined with strong independent oversight, further improves reporting quality, reflecting the positive influence of independent commissioners and sound financial governance. The study concludes that environmental performance, as measured by the PROPER scale, plays a significant role in improving sustainability disclosures in Indonesia. It recommends that the Indonesian government provide stronger support and clearer regulations to help companies improve their sustainability practices and contribute to the G20 agenda.

Bank audit committee financial expertise and timely loan loss recognition

AbstractThis study investigates the effects of audit committee financial expertise on the timeliness of banks' loan loss provisions. I employ two regulatory shocks that mandated audit committee expertise—the Federal Deposit Insurance Corporation Improvement Act in 1991 (FDICIA) and a modified listing standard for NYSE and NASDAQ firms in 1999—as quasi‐exogenous settings to investigate the effects of audit committee financial expertise on the timeliness of loan loss provisioning. Using a difference‐in‐differences research design, I find that the timeliness of loan loss provisions increases with audit committee financial expertise both for the FDICIA treatment group, which had larger banks than the control group, and for the NYSE and NASDAQ exchange treatment group, which had smaller banks than the control group. Further, I find that the results are stronger for banks that have lower regulatory scrutiny, are audited by Big 4 auditors, and do not have staggered boards. Finally, I find that audit committee financial expertise decreases discretionary loan loss provisions and financial restatements. Overall, these findings suggest the importance of audit committee financial expertise in loan‐related matters, which is particularly relevant in the context of the recent Current Expected Credit Losses implementation.

Pengaruh Financial Distress dan Good Corporate Governance terhadap Manajemen Laba

This research aims to examine the effect of financial distress and good corporate governance on earnings management in manufacturing companies listed on the Indonesia Stock Exchange (BEI). The sampling method used was a purposive sampling method based on predetermined criteria. The samples used in this research were 60 samples from manufacturing companies period 2022. The results of this research show that the variables financial distress, institutional ownership, and audit committee have no effect on earnings management. Meanwhile, managerial ownership has a negative effect on earnings management.

Risk Governance Unlocks Islamic Banks’ Dual Performance Goals

This study investigates the moderating effect of risk governance structures on the relationship between risk management—covering insolvency, financing, and operational risks—and the financial and social performance of Islamic banks in Indonesia. Using dynamic panel data regression, the analysis draws on annual report data from 11 Islamic commercial banks over the period from 2012 to 2021. The findings show that certain risk governance structures, such as the size and independence of the audit committee, the expertise of its members, the frequency of meetings, and the quality of external audits, significantly enhance the effectiveness of risk management in improving both financial and social outcomes. Moreover, unique Islamic banking structures, such as the size of the Shariah Supervisory Board and the frequency of its meetings, further strengthen these effects. These results highlight the importance of robust governance in optimizing risk management and improving the overall performance of Islamic banks, with implications for regulatory bodies and Islamic financial institutions aiming to improve governance frameworks.

The development of the European Union auditing research over the past decade: a systematic literature review and future research opportunities

Purpose The purpose of this study is to provide a systematic review of research development on auditing in the European Union over the past decade and suggest future research directions. Design/methodology/approach Following the PRISMA protocol, the authors systematically reviewed the relevant literature and conducted a qualitative content analysis of 107 studies on auditing in the European Union published between 2012 and 2023. Findings The results indicate increased auditing literature in the European Union from 2012 to August 2023. Around 40% of the papers were focused on six nations: Germany, Spain, Italy, the UK, Sweden and France. Additionally, 35.5% of papers have been published in three major journals: Accounting in Europe, International Journal of Auditing and the European Accounting Review. Moreover, 82.24% of papers used quantitative methods, with a few using qualitative or mixed methods. Also, most of the studies in the sample endorsed the European Union’s auditing reforms, which included implementing a cap on nonaudit fees and enhancing the independence of audit committees. Contrary to this viewpoint, multiple studies have expressed disagreement with enforcing a total prohibition on nonaudit services, as certain services can enhance auditing quality. Similarly, other studies have contested the necessity of mandatory auditor rotation every 10 years, citing the significant additional expenses associated with this practice. Finally, further studies supported the European Union’s decision to make the joint audit voluntary, as it is related to high audit fees and low audit quality. Research limitations/implications The limitations of this research primarily stem from the authors’ choices in selecting the database and defining the criteria for searching the studied papers. Practical implications This paper offers valuable insights into the future research prospects in the European Union’s auditing field. Hence, this analysis can be helpful for researchers and practitioners in developing this field based on future research recommendations and the identified themes. Originality/value To the best of the authors’ knowledge, this paper is the first study to systematically review the developments of the European Union auditing literature over the past decade.

Audit committee and the quality of financial reporting information - evidence in the new organisational structure of Vietnamese listed companies

The Audit Committee (AC) is a new part of organisational structure of a joint-stock company (JSCs), which has just been legislated in Vietnam since 2021. The AC aims to supervise activities to enhance the truthfulness and fairness of financial reporting information. The article aims to analyze and evaluate the actual effectiveness of the AC in improving the quality of financial statement information. The secondary data including 255 observations from listed companies that have established AC. We carried out analysis and forecast using the binary logistic model. The results show that the AC has played a primary role to improve the quality of financial statement information.