Committee Attributes Research Articles

The Relationship between Audit Committee Attributes and Financial Reporting Quality among Manufacturing Firms in Kenya

The Relationship between Audit Committee Attributes and Financial Reporting Quality among Manufacturing Firms in Kenya

Audit Committee Attributes and Share Price Reaction of Listed Deposit Money Banks in Nigeria

This study investigated the effect of audit committee characteristics on share price reaction of listed Deposit Money Banks (DMBs) in Nigeria. Specifically, the study sought to examine the effect of audit committee independence, expertise, size, frequency of meetings and gender diversity on share price reaction of listed DMBs in Nigeria. The study adopted the ex-post facto research design. The study used a sample of 12 DMBs from a population of 14 DMBs listed on the Nigerian Exchange Group using the filtering method. Data were sourced from annual reports and accounts of the sampled DMBs in Nigeria. The study period covered ten (10) years from 2011-2020. Pooled Auto Regressive Distributive Lag (ARDL) Model was used for data analysis. The results of the study suggested that audit committee independence, size, frequency of meetings and gender diversity have a perverse and significant effect on share price reaction of DMBs listed in Nigeria. The result of the study also established that audit committee financial expertise positively but insignificantly affects share price reaction of DMBs listed in Nigeria. The study, therefore, recommended that financial expertise of the audit committee members should be given utmost attention by the board since it exerts a positive effect on share price reaction. This is supported by the requirements of CAMA 2020 which states in section 404 subsection (5) that all audit committee members should be financially literate and at least one of them should be a member of a professional accounting body established by an Act of the Nigerian Parliament. The study also recommended that DMBs should strive to maintain a small audit committee size below the stipulated maximum number of 5 as stipulated by CAMA 2020 for effective performance.

Corporate social responsibility commitment of women directors through audit committees: evidence from international firms

PropósitoEste trabajo explora el impacto de algunas características de los comités de auditoría (consejeros ejecutivos e independientes y la asistencia de los consejeros a las reuniones de los comités de auditoría) en la divulgación de información de responsabilidad social corporativa (RSC). Además, también tiene como objetivo analizar el efecto moderador de las consejeras del consejo de administración en la relación entre las características de los comités y la divulgación de la RSC.Diseño/metodología/enfoqueEste estudio se basa en una muestra internacional que comprende 13,264 observaciones empresas-año no financieras desde 2007 hasta 2018.HallazgosLos resultados muestran que los consejeros ejecutivos e independientes en comités de auditoría tienen un impacto negativo en la divulgación de información de RSC, mientras que la asistencia de los consejeros a las reuniones del comité se asocia positivamente con la divulgación de información sobre RSC. Nuestros resultados también evidencian que las consejeras del consejo de administración moderan positivamente la asociación negativa entre los consejeros ejecutivos e independientes de los comités de auditoría y la divulgación de información sobre RSC. Finalmente, los hallazgos también muestran que las consejeras no moderan el impacto positivo de la asistencia de los consejeros a las reuniones de los comités de auditoría y la divulgación sobre RSC.Limitaciones/implicaciones de la investigaciónEste estudio se centra en los atributos de los comités de auditoría de una muestra de empresas internacionales no financieras cotizadas.Originalidad/valorEste es el primer estudio que examina el papel moderador de las consejeras de los consejos en las relaciones entre los consejeros ejecutivos en los comités de auditoría y el informe de RSC y la asistencia media de los consejeros a las reuniones de los comités de auditoría y divulgación de la RSC.

DO AUDIT COMMITTEE ATTRIBUTES ENHANCES ASSURANCE SERVICES OF LISTED MULTINATIONAL FIRMS?

Credibility and quality of audited corporate financial report domiciles in the assurance services rendered by the professional experts. Divers of these experts of assurer of subject matter exist in the corporate world that enhance and add value of information to the quality of financial statements. Thus, this study's focal point is to investigate enhancement service rendered by the Audit Committee Attributes (ACA) as its services affect the quality of financial statements of multinational companies. The study employs desktop and ex post facto research designs to dissect the data. The result reveals that ACA metrics such as Ardit Committee Size (ACS) and frequency of Audit Committee meeting (FACM) have adverse influence on the quality of financial statement, on the second side Audit Committee Gender Diversity (ACGD) has enhancement influence on the quality of audited financial report.

Audit Committee Attributes and Firm Performance

"The audit committee provides considerable support when achieving corporate goals and objectives through practicing good governance in a firm. Although the audit committee is a critical element of corporate governance there is a dearth of studies relating to the audit committee. Thus, this research examined the impact of audit committee attributes on firm performance based on the Stewardship theory. The population for the study includes the listed companies in the Colombo Stock Exchange and the top 100 companies which have the highest market capitalization. The data collection study is an archival strategy based on the annual reports of the sample companies for the two years. The goals of this study are met with the help of EViews software and descriptive statistics and panel regression. The research findings of the study suggested that there is a positive relationship between Audit committee size, interlock of directors on the audit committee, and risk management committee with the firm's performance. The Interlock of directors on both the audit committee and nomination committee as well as the audit committee and remuneration committee have a negative relationship with the firm performance. Additionally, this study found that audit committee independence, financial expertise, audit committee diversification, and meeting frequency have no significant relationship with the firm performance. The findings of this study suggest that there should be audit committee compliance requirements that result in an increase in stewardship and improve performance which added new knowledge to Stakeholder theory."

The impact of audit committee characteristics on Saudi bank performance

This paper examines the impact of audit committee characteristics on the performance of Saudi listed banks. Data are collected from the annual reports of Saudi listed banks from 2010 to 2018. To test hypotheses, this study applies the random effects model as the main method of analysis, while the ordinary least square (OLS), the feasible generalized least squares (FGLS), and the panel-corrected standard errors (PCSE) methods are used for robustness check and additional analysis. The empirical results indicate a significant positive effect of audit committee independence on all measures of bank performance (ROA, ROE, Tobin’s Q). The empirical results of this study also provide important implications for regulatory bodies and market participants in Saudi Arabia and developing countries to understand the actual role of different attributes of the audit committees on firm performance.

Audit Committee Attributes and Whistle-Blowing Policy

There is limited evidence about the association between audit committee (AC) characteristics and effective whistleblowing policy. In light of the above, this study explores the relationship between AC and the effective whistle-blowing policy in Nigerian Banks. The study uses a period of ten years (2009 to 2019). It employs a logistic regression technique in the analysis. Data for the study were found from the listed banks’ yearly reports. The results revealed that firms that have AC composed of independent directors, have more financial experts, and meet regularly are more likely to have an effective whistleblowing policy. Moreover, a larger AC is associated with a weak whistleblowing policy. Therefore, it is recommended that regulators such as the Security and Exchange Commission (SEC) and the Nigerian Central Bank (CBN) should ensure stringent compliance of their codes of corporate governance on AC composition as both of them recommend the existence of autonomous directors and financial experts in the AC. However, the findings and recommendations are only applicable to listed banks in Nigeria. For this reason, further research may be needed to be conducted on the AC attributes in other sectors like manufacturing firms.

The role of the audit committee in enhancing the credibility of CSR disclosure: Evidence from STOXX Europe 600 members

AbstractThis study examines the influence of audit committee attributes, namely financial expertise, independence, meeting frequency and size, on the adoption of CSR assurance. The study also offers insight into the effect of audit committee attributes on the scope and level of CSR assurance and the selection of CSR assurance providers. Contextually, this is achieved using a sample of European companies listed on the STOXX 600 index over the period 2012–2018. The findings show that attributes related to audit committee financial expertise, audit committee independence and audit committee meeting frequency and the existence of a CSR committee, are positively linked with the adoption of CSR assurance. Moreover, our empirical analysis further highlights the critical role of audit committee financial expert members in enhancing the scope and level of CSR assurance. Furthermore, audit committee with more frequent meetings lead to higher assurance scopes. Our findings offer significant and multidimensional insights for regulators, policymakers and professionals, regarding the revision and establishment of regulations concerning the audit committee structure.

Effect of Audit Committee Attributes on Value of Listed Deposit Money Banks in Nigeria

Effect of Audit Committee Attributes on Value of Listed Deposit Money Banks in Nigeria

The role of audit committees in mitigating earnings management: evidence from Jordan

PurposeThis study examines the relationship between audit committees (ACs) and earnings management (EM) in the developing country context of Jordan. In particular, it investigates whether audit committee attributes, including their size, independence, expertise and meetings, are able to restrict discretionary accruals as a proxy for EM.Design/methodology/approachThe generalized least square (GLS) regression was used to study the association between audit committee attributes and discretionary accruals, as a proxy of EM, for a sample of industrial firms listed on the Amman Stock Exchange (ASE) during the period 2012–2020. Data were obtained from the firms' annual reports.FindingsThe regression results indicate that audit committee independence is the only audit committee attribute that seems to improve the effectiveness of ACs, in that it is significantly associated with less EM, while other audit committee attributes that were tested do not show statistically significant associations.Research limitations/implicationsIn emerging markets, like Jordan, ACs may not be an efficient monitoring mechanism; therefore, it can be argued that the prediction made by the agency theory about the role of ACs in mitigating opportunistic EM activities does not necessarily apply to all contexts.Practical implicationsA better understanding of audit committee effectiveness in developing countries could help regulators in these countries assess the impact of planned corporate governance (CG) reforms and to better monitor and enhance the performance of ACs.Social implicationsIn a setting characterized by closely held companies, high power distance and low demand for high-quality CG mechanisms, this study contributes to understanding how this business system operates, and how improving CG mechanisms could be successful in such cultures.Originality/valueThis study investigates the under-researched relationship between audit committee characteristics and EM in developing countries. In so doing, it aims to provide new insights into this relationship within the developing context case of Jordan, including if and how the institutional setting influences this relationship.

Does the expertise of the audit committee chairperson moderate the association between audit committee attributes and firm performance?

The current research aims to examine how audit committee (AC) attributes affect firm performance in the finance sector. Its main goal is to determine if the audit committee chairperson’s (ACC) experience has a moderating effect on the relationship between AC attributes and the financial firm’s performance. The directors who have sufficient experience are valued as intellectual resources by the companies for which they make decisions (Beasley, 1996). In addition, Turley and Zaman (2007) found that the audit committee chairperson’s individual power has a substantial effect on firm performance. This study used data from 44 financial sector companies listed on the Saudi Stock Exchange from 2015 to 2019, totalling 195 firm-year observations. The Pearson correlation coefficient and multiple linear regressions were employed. According to the study’s results, AC independence has a significant impact on the performance of financial companies. However, the AC chairman’s expertise (ACCEXP) had no moderating impact on the association between AC independence and firm performance. On the contrary, the findings indicate that ACCEXP has a significant moderating impact on the association between AC meetings, AC size and firm performance.

Corporate governance and sustainability reporting quality: evidence from Nigeria

PurposeThis study aims to examine the association between corporate governance and sustainability reporting quality of listed firms in Nigeria.Design/methodology/approachThe authors measure corporate governance using board governance variables (board size, board independence, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting). The authors measured sustainability reporting quality using a scoring system, which ranges between 0 and 4. The highest score is achieved when sustainability reporting is independently assured by an audit firm. The lowest score refers to the absence of sustainability reporting. The study emphasizes 120 listed firms on Nigeria Stock Exchange using the ordered logistic regression technique.FindingsThe results indicate that board governance variables (board size, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting) are significantly associated with sustainability reporting quality. Additional analysis reveals that external assurance contributes to the quality of sustainability reporting through corporate governance characteristics.Research limitations/implicationsThis study is restricted to a single country. Future studies should consider a cross-country study, which may help to establish a comparative analysis. Likewise, the future study could consider other regression techniques using a continuous measurement of the global reporting initiative in measuring sustainability reporting quality.Practical implicationsThis study’s findings have important implications for policymakers and practitioners, especially the corporate executives and top management. Companies are encouraged to restructure their board to enhance better monitoring and support towards better sustainability reporting.Social implicationsDisclosure on sustainability reporting helps corporate organizations advance the issues of sustainability both nationally and globally.Originality/valueThis current study adds to accounting literature by examining how corporate governance contributes to sustainability reporting practices within the Nigerian context. Drawing from the result, the study provides strong interconnectivity between the corporate board and audit committee in driving sustainability reporting quality within an organizational context.

Do the Attributes of Audit Committee Explain Non-Performing Loans? Evidence from an Emerging Economy

This study examined whether various attributes of the audit committee of listed banks in Bangladesh explain the level of non-performing loans (NPLs). This study used a panel data set comprising all 30 listed banks with 250 bank-year observations for the period 2013–2017. It employed the random-effects GLS regression model with cluster robust standard error and AR (1) disturbance to examine the effect of several audit committee attributes on NPLs. We found that holding audit committee meetings frequently and a higher number of independent members in the audit committee facilitate to reduce NPLs. We, however, find no explicit evidence that the other attributes of the audit committee examined (audit committee size, financial experience and financial literacy of the audit committee members, professional qualifications of the audit committee Chairman) contribute in reducing NPLs. The findings will be useful for policymakers of the banking sector in Bangladesh and the relevant regulatory bodies in enabling them to understand the role of the various attributes of the audit committee in the incidence of NPLs. Keywords: attributes, audit committee, non-performing loans (NPLs), listed banks, Bangladesh

Audit Committee Attributes, Audit Quality, and Financial Reporting Quality: Evidence from the GCC Stock Markets

The main objective of this study is to empirically investigate whether the audit committee (AC) attributes and the quality of external auditor are associated with financial reporting quality (FRQ) of companies listed on the gulf cooperation council (GCC) countries’ stock markets. To achieve the study’s objectives, data was collected from a sample of 115 companies from four GCC countries during the period from 2017-2019 that represents 345 firm-year observations. Five hypotheses were tested, FRQ as dependent variable was regressed with five independent variables. For measuring the FRQ, the author adopted the qualitative approach using checklist developed by Beest, et al. 2009 sponsored by Nijmegen Center for Economics (NiCE) with limited modification based on the new amendments of IASB conceptual framework in 2018. The study findings reveal that the level of FRQ on the study sample averaged 63% while the minimum and the maximum valued 40% and 86% respectively. The findings indicate that FRQ are positively and significantly associated with the four AC attributes and quality of external auditor so, all hypotheses are accepted, which infer that FRQ will be enhanced if a company formed AC having, bigger size, more independence, financial experience, meetings frequently, and hiring high quality external auditor. The findings of this study have wide implications to all stakeholders especially, investors, creditors, auditors, management, in addition to stock markets regulators and standard-sitting bodies for the role of AC attributes and external auditor on improving FRQ

Effectiveness of Audit Committee Attributes on Firm Performance of CNX Nifty Companies in India

Effectiveness of Audit Committee Attributes on Firm Performance of CNX Nifty Companies in India

Do corporate attributes impact integrated reporting quality? An empirical evidence

PurposeThis study aims to examine the impact of corporate attributes on integrated reporting quality of top 100 listed firms in South Africa.Design/methodology/approachWith a sample of the top 100 listed firms in South Africa, this paper drew insights from the legitimacy and stakeholder theory to examine the impact of corporate attributes on integrated reporting quality. This paper measured integrated reporting quality based on the International Integrated Reporting Council framework of 2013. Corporate attributes were determined taking into consideration three broad perspectives (board committee attributes, firm attributes and audit committee attributes). This paper analyzed the data using content analysis, ordered probit regression and logistic regression method.FindingsResults indicate that board committee attributes, firm attributes and audit committee attributes have a positive and significant relationship with integrated reporting quality. Additional analysis reveals that external assurance contributes to the quality of integrated reporting. The findings empirically revealed that most South African firms have intensified efforts toward the quality and full disclosure of integrated reporting framework.Research limitations/implicationsThe study was limited to a sample size of 100 firms, which is country-specific, however, it sets the tone for future empirical research on the subject matter. This study provides an avenue for future research in the area of corporate attributes and integrated reporting quality in other emerging countries, especially other African countries.Practical implicationsThe result of this study provides practical implications in the areas of good corporate governance, corporate reporting and integrated reporting. The empirical approach used in this study emphasizes the need for corporate organizations to introduce integrated reporting practices into their reporting cycle. The finding implies that non-compliance with integrated reporting by corporate organizations may have an adverse effect on corporate growth, corporate sustainability and corporate reputation in the long run.Originality/valueThe work extends prior research on the subject of integrated reporting in South Africa. Also, this study broadens the application of legitimacy and stakeholder theory in influencing corporate organizations to disclose relevant information that could aids stakeholders’ interest.

Risk Management Committee Attributes: A Review of the Literature and Future Directions

The aim of this paper is to review existing literature related to the risk management committee attributes (RMC) that can facilitate transactions between board committees and add value to corporations. The emphasis of this study is on RMC as it has become a crucial element, especially after the collapse of large corporations. RMCs have attracted the attention of academics and become one of the important factors that enhance the companies' performance as well as the quality of financial reporting (FRQ), and its demographic attributes are expected to play an important role in corporations. However, prior studies on the area have found inconclusive results and provide several gaps in the literature due to the mixed findings. In addition, prior studies highlight the RMCs attributes that affect corporate's performance and also the reporting quality and provide an urge to conduct more researches in related fields. Taking the period from 2003 to 2021, this paper reviews previous studies and gives a better understanding of RMC's role and future research directions. In addition, this study provides recommendations to the policymakers, regarding the demographic attributes of RMCs that can influence corporate performance and its FRQ. Finally, this review demonstrates that businesses should concentrate on these mechanisms to strengthen their performance and their reporting quality.

CSR committee attributes and CSR performance: UK evidence

PurposeThis study aims to explore the set of corporate social responsibility (CSR) committee attributes that may enhance CSR performance and CSR strategy formation and reduce CSR controversies.[AQ1] Towards this end, the study also explores the differences between companies with and without CSR committees in terms of these three CSR performance facets.Design/methodology/approachThe study uses a sample of financial times stock exchange (FTSE) 100 non-financial companies in 2015–2017. Kruskal-Wallis test is conducted to test the differences in CSR performance in firms with CSR board-level committee, CSR management committee and no committees. Additionally, a regression model is used to explore the attributes of CSR committees that lead to better/less CSR performance and CSR strategy/CSR controversies. A two-stage least squares regression model was used as a robustness check.FindingsFirms with board CSR committee have better CSR performance and CSR strategy and lower CSR controversies than both firms with no CSR committees and firms with a CSR management committee. Regression results show that CSR committees that are predominantly consisting of independent board members, chaired by a female director and setting more meetings have better CSR performance. Additionally, CSR committees were found to have lower CSR controversies when having more independent directors and a chair with CSR expertise. CSR strategy was better with the CSR committee represented by a larger group of members.Originality/valueThis study makes several contributions to the sustainability governance literature and regulatory/guidance interfaces. There is extant literature examining audit committee attributes and their effects on various firm outcomes. The same can be said on the regulations of the audit committee. CSR committees’ composition and benefits are, by far, less regulated and largely under-researched. Hence, this paper is considered an early attempt to explore the CSR performance improvements a CSR committee may bring and the composition that would bring better CSR performance.

Audit committee attributes, board attributes and market performance of listed deposit money banks in Nigeria

This paper aims to discover the association between various audit committee and board attributes and the market performance of listed deposit money banks in Nigeria. The study intends to determine the influence of audit committee size, gender diversity, expertise, board size and board shareholding on market performance (measured by Tobin Q). Panel data was gathered from twelve (12) banks listed on the Nigerian Stock Exchange from 2013 to 2017. The study used fixed and random regression analysis. The results concluded that the association between audit committee size, board size and Tobin Q was negatively significant. There was a positively significant impact of audit committee gender diversity and audit committee expertise on Tobin Q. The study showed a positive but insignificant influence of board shareholding on market performance. The results imply that weakness in governance structures might lead to lower market performance. This study recommends that firms ensure that appointment criteria prioritize knowledge and competence, and regulatory bodies are also encouraged to track the compliance of listed firms with corporate governance regulations. AcknowledgmentThe authors would like to acknowledge Covenant University for its financial support during the course of this research paper.

Corporate Board Committees and Corporate Outcomes: An International Systematic Literature Review and Agenda for Future Research

This paper comprehensively reviews the current body of international accounting literature regarding advisory/monitoring committees and corporate outcomes. Specifically, it synthesizes, appraises, and extends current knowledge on the (a) theoretical (i.e., economic, accounting/corporate governance, sociological and socio-psychological) perspectives and (b) empirical evidence of the observable and less visible attributes at both the individual and committee levels and their link with a wide range (financial/non-financial) of corporate outcomes. Using the systematic literature review method, 304 articles from 59 journals in the fields of accounting and finance that were published between January 1992 and December 2018 are reviewed. The main findings are as follows. First and theoretically, agency theory is the most dominant applied theory/studies with no application of theory at all (descriptive), while the application of integrated theoretical frameworks is lacking in the reviewed articles. Secondly, the existing empirical evidence focusses excessively on (a) monitoring instead of advisory committees and (b) observable rather than less visible committee attributes. Thirdly, scarcity of cross-country studies along with methodological limitations relating to measurement inconsistencies, insufficiency of variables, and dominance of quantitative studies, among others, are identified. Finally, promising future research avenues are outlined.