Committee Attributes Research Articles

Enhancing Financial Reporting Quality: The Influence of Audit Committee Attributes and the Role of Audit Quality

This study to analyze the influence of the positive Characteristics of the audit committee consisting of an independent audit committee, knowledge accountancy audit committee, number meeting audit committee, and size audit committee on quality reporting finance. Besides that For analyzing audit quality strengthening moderation between characteristics of the audit committee with quality reporting finance. Research This uses agency theory which emphasizes the conflict of interest between the principal and agent. Research This is a study associative with using secondary data from the Indonesia Stock Exchange (BEI) or via the company website of each sample. The sample collection technique sample uses method purposive sampling. Sample in study This is all over incoming companies The LQ 45 index is listed on the Indonesia Stock Exchange (IDX) with a total sample of 120 observations. For the test, the hypothesis used MRA analysis with the use of application data. The results of the research include the independent audit committee, knowledgeaccountancy audit committee, number meeting audit committee, and the number of influential audit committees for quality reporting finance. Companies that use Big Four auditors can strengthen the connection between the independent audit committee and knowledge accountancy audit committee on quality reporting finance whereas companies that use Big 4 auditors weaken the connection amount meeting audit committee and the amount audit committee on quality reporting finance.

INVESTIGATING THE IMPACT OF AUDIT COMMITTEE ATTRIBUTES ON COMPANY PERFORMANCE: A MALAYSIAN FOCUS

Background and Purpose: This study aims to examine the relationship between selected audit committee attributes (gender diversity, size, meeting, independence, expertise) and company performance that are assessed as return on equity (ROE) and return on asset (ROA). As one of the primary corporate governance mechanisms facilitating corporate efficiency, audit committees positively impact company performance. Methodology: This quantitative cross-sectional study underpinned the agency theory through the target population: public listed companies under the Bursa Malaysia. Secondary data were gathered from the corporate annual report of 106 companies and Eikon database between 2018 and 2020 and subsequently analyzed with Pearson Correlation and Multiple Linear Regression using SPSS. Findings: Resultantly, a positive gender diversity-size correlation was identified with company performance as opposed to meeting, independence, and expertise. Furthermore, a significant gender diversity-size relationship was determined with company performance while no substantial counterparts between (i) meeting and independence and (ii) expertise and company performance were identified for the selected public listed companies. In this vein, audit committee attributes (gender diversity and size) could be utilized as a mechanism for high company performance. Contributions: The study outcomes offer useful insights into optimizing current corporate governance structures and regulations for relevant authorities. Keywords: Audit committee, corporate governance, company performance, Malaysia. Cite as: Gregory, V., Yusoff, H., Tapsir, R., & Fauzi, H. (2024). Investigating the impact of audit committee attributes on company performance: a Malaysian focus. Journal of Nusantara Studies, 9(2), 185-217. http://dx.doi.org/10.24200/jonus.vol9iss2pp185-217

The Effect of Audit Committee Attributes on Nigerian Listed Companies’ Firm Performance

The Effect of Audit Committee Attributes on Nigerian Listed Companies’ Firm Performance

Does internal audit matter? Audit committee, its attributes, and corporate social responsibility reporting quality

This study explores the nexus between internal audit, audit committee attributes, and Corporate Social Responsibility (CSR) disclosure quality in A-share listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2019. Utilizing refined samples and robust datasets, this investigation reveals critical insights that a robust internal control system significantly correlates with higher-quality CSR disclosure, underscoring its pivotal role in safeguarding non-financial reporting integrity and enhancing transparency in CSR disclosures. Larger audit committees are positively associated with improved CSR disclosure quality. This highlights the strategic advantage of a diverse and expansive audit committee in navigating the complexities of CSR reporting. Contrary to expectations, the proportion of independent directors on the audit committee and the frequency of audit committee meetings do not show a significant positive relationship with CSR disclosure. Companies benefit from strategic investments in internal control systems, crucial for non-financial reporting integrity and fortified CSR disclosure practices. In conclusion, this study provides concise insights into critical factors influencing CSR disclosure quality in Chinese companies, offering actionable implications for corporate practices and regulatory frameworks. AcknowledgmentThis paper is co-funded by the European Union through the European Education and Culture Executive Agency (EACEA) within the project “EU BEST PRACTICE OF LIFE CYCLE ASSESSMENT, SOCIAL, ENVIRONMENTAL ACCOUNTING AND SUSTAINABILITY REPORTING” – 101047667-ERASMUS-JMO-2021-MODULE https://jm.snau.edu.ua/en/eu-best-practice-of-life-cycle-assessment-social-envi­ron­mental-accounting-and-sustainability-reporting/ Oleh Pasko expresses sincere gratitude for the support from the Kirkland Research Program, generously provided by the Leaders of Change Foundation established by the Polish-American Freedom Foundation.

Audit committee attributes, audit quality and performance of oil and gas companies

Purpose: This study examines the audit committee attributes, audit quality, and financial performance of listed oil and gas companies in Nigeria. Research methodology: Audit committee attributes were measured by audit committee size, audit committee independence, and audit committee financial expertise, and audit quality was measured by audit fees charged by an external auditor. Financial performance is measured in terms of earnings per share. The researcher used secondary data extracted from the ten listed oil and gas firms annual reports, and the accounts were analyzed using Panel Least Square. Results: This study reveals a positive and statistically significant relationship between audit committee independence and earnings per share. It also shows that audit quality moderates audit committee attributes significantly and increases firm performance. This study recommends that maintaining high audit quality within the audit committee is crucial for a firm if it aims to offer increased assurance to investors and stakeholders concerning the precision and dependability of its financial statements. Limitations: This study was limited to listed oil and gas companies in Nigeria ranging from to 2016-2022. Contribution: This study examined factors that can moderate the relationship between audit committees and the financial performance of listed oil and gas companies in Nigeria. One such factor is audit quality, which can potentially enhance or diminish the impact of audit committee effectiveness on financial performance. No study conducted in Nigeria has examined this relationship specifically in the oil and gas sector. This knowledge gap served as the rationale for conducting this study.

THE IMPACT OF ESG ON FIRM VALUE WITH AUDIT COMMITTEE AS VARIABLE MODERATING

This research endeavors to present empirical evidence concerning the impact of environmental, social, and governance (ESG) factors on Firm value, incorporating the audit committee's attributes (Expertise, tenure, gender, and total) as moderating elements. This study uses a sample of companies that have an ESG score index and are listed on the IDX during the 2018-2022 research period. The sample selection method used is purposive sampling. The results prove that environmental, social, and governance (ESG) have a negative effect on firm value. The audit committee in this study was not able to moderate the relationship between environmental, social and,governance (ESG) and firm value. The implications of this study are enormous because it provides support for the application of stakeholder, legitimacy and agency theories. However, it is important to underline that the scope of this study is limited to companies in Indonesia, therefore the conclusions may not be directly transferable to other countries.

A Comparative Analysis of Sustainability Committee Attributes and Reporting Quality in Nigeria and South Africa

A Comparative Analysis of Sustainability Committee Attributes and Reporting Quality in Nigeria and South Africa

Audit committee characteristics and firm performance: a cross-country meta-analysis

PurposeThe purpose of this study is to investigate the impact of audit committee characteristics on firm performance. In particular, the authors employ the random-effects variant of the Hunter–Schmidt meta-analyze procedure to analyze the effects of key audit committee attributes, namely audit committee independence, audit committee expertise, audit committee size, audit committee meeting along with big four impact on firm performance. The authors hope to gain a better understanding of the function of audit committees in enhancing firm performance and to uncover potential discrepancies in prior findings due to varying economic levels or performance metrics.Design/methodology/approachThis study uses the Hunter–Schmidt method to conduct a meta-analysis of 39 previous studies published between 2012 and 2022 to investigate the relationship between audit committee characteristics and firm performance.FindingsThe results indicate that audit committee independence, expertise, size and affiliation with the big four have a significant and positive effect on firm performance, while audit committee meetings have a non-significant effect. Furthermore, findings suggest that companies should carefully consider the contextual factors that may impact the effectiveness of their corporate governance structures, such as economic level, when designing and implementing governance mechanisms.Originality/valueThis study is significant as it is the first to combine and analyze previous research on this topic and highlights the importance of certain audit committee characteristics in enhancing financial reporting quality and corporate governance.

Do the attributes of a risk management committee affect company performance? A comparative study before and after the COVID-19 pandemic

This study focuses on the association between specific attributes of risk management committees (RMCs) and the performance of financial companies listed on the Amman Stock Exchange (ASE). The chosen period, from 2017 to 2022, allows for the examination of trends and changes over time (Callahan & Soileau, 2017). The results indicate that the size of the RMC, independence, and gender diversity within the committee are positively and significantly related to company performance. By contrast, the frequency of meetings and the experience of RMC members do not seem to have a significant impact on performance. The results have potential implications for both managers and boards of companies. By understanding the positive relationship between certain RMC characteristics and firm performance, decision-makers can make informed choices when structuring their RMC. This, in turn, would contribute to enhancing the overall corporate governance of the company, which is crucial for its success. We acknowledge that the association between RMC attributes and firm performance is not yet fully understood. Despite this ambiguity, our research contributes to prior studies by shedding light on the specific roles that various RMC characteristics play in driving firm performance, thereby deepening our understanding of the complex interactions between corporate governance mechanisms and company outcomes.

Sustainability reporting and audit committee attributes: Evidence from banks in Indonesia

This paper examined the effects of audit committee attributes on the sustainability reporting (SR) of commercial banks in Indonesia. This study conducted a cross-sectional and time-series analysis using a sample of 74 commercial banks from 2015 to 2019. This study investigated the audit committee attributes, including financial expertise, size, independence, and meeting frequency. The model under study was underpinned by the theory of legitimacy, stakeholders, and agency. The results showed that the financial expertise of audit committee had an inverse relationship with SR disclosure. Meanwhile, there was a positive relationship between committee independence, bank size, bank age, and type of auditor with SR disclosure. These findings imply that the banks should further focus on the audit committee’s attributes as an effective measure to produce quality SR disclosure. In addition, non-financial expertise, especially in the field of sustainability, is a skill that the audit committee needs to have.

Audit committee attributes, board of director’s independence and energy disclosure for environmental sustainability in Nigeria

Purpose This study aims to examine how audit committee (AC) attributes influence quality and quantity disclosure of energy consumed by the listed nonfinancial firms for the period of five years (2016–2020). The study aims at providing empirical evidence on how board of director’s independence influences the relationship between AC attributes and firms’ energy in achieving sustainable development goals (SDGs) on world climate policy. Design/methodology/approach The study obtained data from a sample of 83 listed nonfinancial firms, content analysis technique was used to compute energy disclosure indexes using global reporting initiative standards, while regression analysis was conducted to test the relationship among research variables. Findings The study revealed that AC independence, diversity and meetings were significantly related with energy disclosure. Also, the study found that other variables were insignificantly related with energy disclosure. Research limitations/implications The study is constrained for not considering all listed firms in the country. Furthermore, the study considered selected attributes, other important audit-committee size attributes such as audit-committee size, audit-committee size tenure could be study in by the future study. Practical implications The study’s findings would have practical implications for corporations and other business organizations seeking to actively involve the energy-related SDGs 7 and 13 in their business models and successfully communicate these efforts to stakeholders. Originality/value To the best of author’s knowledge, this is the first study that provides empirical evidence on the effect of AC attributes on the energy disclosure using effect of board independence as moderator in Nigeria.

Effect of Board and Audit Committee Attributes on Earnings Management: Evidence from Listed Non-Financial Firms in Nigeria

This study examines the effect of board and audit committee attributes on earnings management. The study adopts purposive sampling technique. The study carries out robust regression statistical model with a 10-year panel data among 36 listed firms in Nigeria. The data used were sourced from the published annual account and reports of sampled firms listed on the Nigeria Exchange Group. The findings from the study reveal that board size, board independence and financial expertise of women on the board and audit committee diminish earnings management while board expertise show mixed finding as board expertise promotes non-discretionary accrual, its equally diminishes discretionary accruals. The findings of this study imply that board and audit committee attributes are important in dealing with earnings management. From our key findings, the study recommends the inclusion of women with financial expertise on the board and audit committee beyond gender diversity. In contrasts to the present practice, the study recommends the inclusion of more independent directors to the board as against the current practice of non-executive directors as independent directors reduce earnings management.

Audit Committee Attributes and Financial Performance of Insurance Firms in Nigeria

The study investigated the effect of audit committee characteristics on the financial performance of firms listed under insurance sector, on the Nigerian stock exchange group covering 2017 to 2021. The study set out four objectives that includes examining the impact of audit committee independence, audit committee size, audit committee gender diversity and audit committee meeting on the return on assets of insurance firms in Nigeria. Ex post facto research design was adopted as suitable which allowed the study to gather secondary data from annual reports of the firms. The insurance sector has twenty three firms listed under it from which seven were chosen as the sample size on the basis of judgment of the researcher. The data were analysed with the descriptive statistics, correlation and regression analysis. The results show that audit committee meeting and audit committee independence have negative and no significant effect on financial performance of insurance firms. Again audit committee size has positive no significant impact but audit committee gender diversity has positive and statistical significant impact on financial performance of Nigerian insurance firms at 5% level. The study recommends amongst others that larger percentage of the audit committee members should be drawn from women gender to maximally utilize the potentials inherent in them that drive financial performance.

Audit Committee Attributes and Sustainability Reporting of Oil and Gas in Nigeria

This study investigates the effect of audit committee attributes and sustainability reporting. The study covered the range of nine (9) years period (2014 – 2022). Mainly, secondary data were pooled from annual reports of the sampled companies listed at floor of Nigeria group exchange as at 31st December 2021 financial year end. Data collected were subjected to polled panel regression analysis estimation. The outcome of statistical results, revealed that audit committee size has a negative and significant impact on sustainability reporting; audit committee independence and audit committee meeting have a negative but insignificant impact on sustainability reporting; and audit committee multiple directorship was found to have a positive and significant impact on sustainability reporting. This study, therefore recommends that audit committee size and composition should be established in line with the relevant provisions of the law; a minimum of one audit committee member should have interlocking directorship in order for companies to gain from the extended knowledge wider channel networks and broader experience that these members gain from serving on different board.

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.

Gender Diversity dan Keahlian Keuangan Komite Audit dalam Memprediksi Financial Statement Fraud

This study aims to examine the effect of audit committee attributes of gender and financial expertise on the ability to predict financial statement fraud. This research is a quantitative research using secondary data obtained through the Indonesian stock exchange. The subjects in this study were audit committees in transportation sector companies listed on the IDX. This study used a sample of 129 observations from 2019 to 2021. The census sampling method used in this study is that all populations fall into the sample category. Data analysis in this study used logistic regression analysis due to variable measurements using dummy. The results showed that gender diversity and financial expertise of the audit committee had a negative effect on detecting financial statement fraud partially, while simultaneously the variables gender diversity and financial expertise together had an effect on detecting financial statement fraud.

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

Audit Committee Attributes and Corporate Tax Avoidance: The Moderating Role of Audit Committee Independence

This research investigates the effect of audit committee (AC) attributes on tax avoidance of the selected fuel & power sector companies listed on DSE of Bangladesh. The study employs a panel data set of 17 fuel & power sector companies for 5 years, i.e., 2015-16 to 2019-2020, and analyses the sample data by applying panel data regression model. The study uses two econometric models for making the empirical analysis and testing the undertaken hypotheses. Adopting several diagnostic tests, and model selection tests, the study runs random effect model for first econometric model and fixed effect model for second econometric model. It also performs a series of robustness tests by adopting alternate regression methods, and alternate proxy of dependent variable for further confirmation of the empirical findings. The study finds that AC size has negative insignificant association with corporate tax avoidance, while AC meeting has negative significant relationship to corporate tax avoidance. Further, the study finds that AC independence moderates the relationship of AC size and AC meeting with corporate tax avoidance. Specifically, the study documents that the interaction of AC size and AC independence (ACS*ACI) has negative significant relationship to corporate tax avoidance, while the interaction of AC meeting and AC independence (ACM*ACI) has positive significant association to corporate tax avoidance. Thus, the study might contribute in policy making by the policymakers and practitioners of the business sectors to control or limit the corporate tax avoidance.

Intellectual Capital Efficiency from the Lens of Audit Committee Attributes

The purpose of this research is to find out the association between audit committee traits and intellectual capital efficiency in the context of Pakistan. For this purpose, this study employs a sample of 28 banks covering a duration of 10 years (2010-2020). Furthermore, this study employs audit committee attributes as an independent variable, while the dependent variable is the efficiency of intellectual capital, which is measured by using the value-added intellectual coefficient (VAIC) approach. As the audit committee aids in strengthening the internal control systems by overseeing the top management decision-making process, thus, it improves the overall effectiveness of organizations. Preluding to the control system process, the results of this study are justified by revealing a significantly positive impact of audit attributes on banks’ intellectual capital efficiency. Therefore, this research illustrates the insights of intellectual capital efficiency with audit committee attributes as a major component, which would be significant for managers in making decisions regarding audit committee composition to increase intellectual capital in the developing nations.

Which attributes of audit committees are most beneficial for European companies? Literature review and research recommendations

PurposeThis paper aims to review 68 archival studies on the impact of audit committees (ACs) on firms’ consequences [(non)financial reporting, performance and audit quality] in European firms.Design/methodology/approachApplying a stakeholder agency-theoretical framework, the author differentiates between three categories of AC variables: presence; composition; and resources, incentives and diligence.FindingsThe author finds that AC composition, (non)financial reporting and audit quality are dominant in the literature review. Other inputs or outputs are either too low in amount or yielded heterogeneous results, hindering clear tendencies. However, there are indications that financial expertise is positively related to financial reporting and audit quality, in line with agency theory and European regulatory assumptions.Research limitations/implicationsIn the discussion of potential future research, the author emphasizes, among others, the need for the recognition of innovative and sustainable AC variables, inclusion of moderator and especially mediator variables and reaction to endogeneity concerns by advanced regression models.Practical implicationsAs the European Commission currently discusses extended regulations on AC duties and composition, this literature review highlights the huge impact of financial expertise on financial reporting and audit quality. In view of the increased monitoring duties of sustainability reporting, both business practices and regulatory bodies should increase the sustainability expertise of ACs.Originality/valueThis analysis makes useful contributions to prior research by focusing on attributes of AC and their impact on firms’ outputs in the European capital market, based on a differentiation between mandatory one-tier/two-tier systems and the choice model. The findings support the promotion of European evidence-based regulations, such as the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.