Effect Of Audit Committee Characteristics Research Articles

The Effect of Audit Committee Characteristics, Audit Opinion, and Company Size on Financial Reporting Fraud

The Effect of Audit Committee Characteristics, Audit Opinion, and Company Size on Financial Reporting Fraud

The Effect Of Audit Committee Characteristics On Earnings Management: A Case Study Of Non-Financial Bumn Companies In Indonesia For The Period 2018-2022

This study aims to further investigate the effect of audit committee characteristics on earnings management practices, as measured by earnings management, in non-financial state-owned companies. This research uses quantitative methodology and data sources are obtained from secondary data. This analysis technique uses multiple regression analysis techniques, classical assumption tests and hypothesis testing, the data observations used in this study were 55. The findings of this study indicate the results of the study that audit committee activity has no significant effect on earnings management so that H1 is not supported, the audit committee size variable shows the results of a significant negative effect on earnings management so that H2 is supported, In line with H1, audit committee competence has no significant effect on earnings management so that H3 is not supported.

Audit committee characteristics and firm financial performance of quoted industrial goods firms in Nigeria

Purpose: This study examines the effects of audit committee characteristics on the financial performance of listed industrial goods firms in Nigeria. Research methodology: This study used an ex-post factor research design and utilized secondary data collected from the annual reports and accounts of thirteen (13) sampled industrial goods firms for a period of 10 years (2013-2022). The sample of firms was obtained using a purposive sampling technique. Data were analyzed using descriptive statistics, correlation, and regression analysis (GLS Random Effect) with the aid of Stata 13. Results: The findings reveal that an insignificant positive effect exists between audit committee size and financial performance (ROA and ROE), while audit committee independence has a significant negative effect on return on assets (ROA) and a negative insignificant effect on return on equity (ROE), and audit committee meetings have a positive significant effect on asset (ROA) and a positive insignificant effect on return on equity (ROE). Limitations: The research is limited to only those companies in the industrial goods sector listed on the Nigerian Stock Exchange from 2013 to 2022 and only focuses on the effect of audit committee characteristics on firm financial performance. There was also incomplete data, which did not allow for a complete and thorough analysis of the entire sector. Contribution: This study contributes to the existing body of literature on the effect of audit committees on the financial performance of Nigeria’s listed industrial goods sector. It provides insights that can assist the board in formulating appropriate strategies to improve their performance.

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.

Impact of audit committee social capital on the adoption of COSO 2013

This study aims to examine the effect of audit committee social capital, measured using network centrality from social network theory, on the adoption of the COSO 2013 updated internal control framework (COSO 2013). Drawing on social capital literature, we argue that well-connected audit committees have informational advantages and reputational concerns which prompt them to learn more about best industry practices and adopt those practices in their own organizations. As predicted, we find organizations that have well-connected audit committees are more likely to adopt COSO 2013 and do so in a timely manner. Additional analysis indicates that our findings are driven by overall audit committee connectedness and not by the connectedness of committee chairs, committee financial experts, or committee members, and hold only for accelerated filers. Further, we find, contrary to conventional wisdom, that audit committee connectedness prompts KPMG client organizations to adopt COSO 2013. The results hold even after controlling for CEO and CFO connectedness and are robust to endogeneity concerns. By linking audit committee connectedness with COSO 2013 adoption, we add to the literature investigating the effect of audit committee characteristics on firm compliance with internal control framework updates.

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.

Audit committee characteristics and firm performance: Evidence from the insurance sector in Oman

This study aims to determine the effect of Audit Committee characteristics on the performance of the eleven insurance companies listed in Oman between 2015 and 2019. This study focuses on the audit committee meetings and their frequency, the size of the committee, their independence, and the knowledge or expertise they possess. After conducting data analysis on the specified dataset, the regression results revealed that ACSIZE is statistically significant at a p-value less than.05. This indicates that the size of an audit committee has a significant impact on an insurance company's performance. In addition, the ACINDE was statistically significant at p.05, demonstrating that the independence of an audit committee plays a significant role in determining the performance of a company. Moreover, the ACEXP variable had a p-value of less than 0.05, indicating that it is statistically significant. This can be interpreted as meaning that the frequency of meetings has a statistically significant impact on the performance of a company. The statistical significance of only three of the four variables was determined. The variable was excluded from the regression model because its p-value was greater than.05. Therefore, the three characteristics of audit committees in the Omani market have a significant impact on the performance of an insurance company, and senior management should ensure that audit committees have approximately four members, are fully independent to limit control by the firm's management, and have extensive financial experience in order to function effectively. This study will be very useful to financial practitioners and policymakers since it contains practical ideas and recommendations. The research results may also contribute to the creation and implementation of strategic policies for improving corporate governance practices with the goal of maximizing profit and wealth.

The Effect of Audit Committee Characteristics and Length of Listing on Financial Distress with Intellectual Capital as a Moderation Variable in Property Companies

This study aims to determine the effect of audit committee characteristics on financial difficulties. The characteristics of the audit committee used in this study are the size of the audit committee, the frequency of audit committee meetings, the number of financial experts on the audit committee, and the length of listing. This study uses a moderating variable, namely intellectual capital. The population in this study is 65 property and real estate companies listed on the Indonesia Stock Exchange in 2016-2020. Based on the purposive sampling method, the samples obtained were from 38 companies. Financial distress criteria in this study were measured using the Modified Altman Z-Score. Data analysis used logistic regression with the help of E-Views software. The results of this study indicate that the size of the audit committee, the frequency of audit committee meetings, the number of financial experts on the audit committee, and the length of listing simultaneously significantly affect financial distress. The results of the partial test show that the frequency of audit committee meetings and the length of listing have a positive and significant effect on financial distress. The number of audit committees and the number of financial experts in the audit committee have no significant impact on financial distress. Intellectual Capital cannot moderate the relationship between the size of the audit committee, the frequency of audit committee meetings, the number of financial experts on the audit committee, and the length of listing on financial distress. Keywords: financial distress, audit committee, altman z-score

Audit Committee and Performance: Evidence from Kenyan Deposit Taking Saccos

This research examined the effect of Audit committee characteristics on performance of Deposit Taking Saccos in Kenya. Audit committee characteristics was measured by independence, terms of service and study specialization as proxy. The study was guided by the Agency Theory and adopted descriptive cross-sectional survey and correlational research designs. A sample size was 108 licensed Deposit Taking Saccos drawn from a target population of 175. Primary data was collected from the board members and management executives. The analysis was done using descriptive statistics and multiple regressions. The study findings suggest that the overall correlation coefficient for Audit Committee characteristics and performance was found to be 0.144 with a p-value of 0.143> =0.05. This implies a weak positive and insignificant relationship between Audit Committee characteristics and performance. Based on findings, the study recommends proper constitution of audit committee with well spelt out terms of service and a consideration be made on appropriate study specialization. Independence of audit committee must be complied with to ensure conformity to best standards of practice. Areas for further studies suggested are conducting studies in other contexts to corroborate these findings and consideration of effect of other variables of Audit Committee characteristics on the performance.

The effect of audit committee characteristics on earnings management in Nigerian listed firms

This study focuses on the effect of audit committee characteristics on earnings management among Listed Firms in Nigeria with aim to ascertain whether audit committee characteristics has effect on earnings management. Audit committee in an organization is to support firm’s governance and oversight functions with the regard to financial reporting, risk management system internal control structure, ethical accountability and internal and external audit functions. Earnings management is an attempt by managers to alter financial information either for their private gain or for the gain of stockholders. The study population was 190 firms listed in the Nigerian Stock Market. The study sample was 150 firms because 40 firms could not provide the needed data for the study as at 2014 to 2019. The study data was generated from the Thomson Reuters Data stream and other variables were handpicked from the firm’s annual reports covering the period of 2014–2019. A Generalized Least Square (GLS) estimator was used in estimating the parameters. The study provides positive and significant relationship between Audit Committee Independence (ACIND), Audit Committee Meetings (ACMT) and Earnings Management of listed Nigerian Firms in Nigeria. However, negative relationship between Audit Committee Size, Audit Committee Financial Expertise, Firm Size and Earnings Management was reported among the Listed Firms in Nigeria. Policy maker should provide policy on the composition of Audit for the committee members to clearly spelt out to enable members perform their functions effectively. Further study should look at diversity of audit committee, ethnicity, and religious influence because of the Nigerian diversity on ethnicity and religion.

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.

A governança corporativa impulsiona o desempenho da empresa? Evidências da Indonésia

Abstract: This study examines the effect of audit committee characteristics and board diversity on the performance of companies in Indonesia. In addition, this research also explores the effect of the audit committee's characteristics and the board's diversity on the company's performance in various age classifications. The study involves 170 samples of primary and secondary sector firms registered on the Indonesian Stock Exchange from 2014 to 2020, analyzed by data panel regression analysis. The study's main findings disclosed that the audit committee's size and the competence of the financial audit committee are positively influencing the market-based firm performance. However, it does not significantly affect the audit committee's meeting frequency regarding the market-based strong performance. Furthermore, the study discloses that foreign and board gender positively influences market-based firm performance. Such findings benefit policymakers in developing appropriate governance mechanisms in the Indonesian market as a developing country. To the best author's knowledge, this study is the first to comprehensively analyze the association between audit committee characteristics and board diversity on market-based firm performance. Furthermore, no previous study conducted additional analyzes based on firm age in the Indonesian context.

Audit committee characteristics and the audit report lag in Greece

We review prior empirical studies that investigate the effect of audit committee characteristics on audit report lag and provide insights about this corpus of scholarly literature. We also determine whether these audit committees’ compositional features are associated with audit report lag in the context of an emerging market (Greece). Using a unique set of data hand-collected from the annual reports for 130 firms listed on the Athens Stock Exchange, a multiple regression analysis is conducted to identify and explain this association. This analysis identifies the four audit committee characteristics most frequently mentioned in the literature. By empirically examining these, we demonstrate that audit committee diligence is associated with a shorter audit report lag. The results generally satisfy a number of alternative benchmark tests that control for different types of proxies and transformations of audit report lag. Our results could assist practitioners and/or policy makers in perceiving the efficacy of audit committee diligence as a means to improve the timeliness of financial reporting. This is, to the best of the authors’ knowledge, the first study that provides a synopsis of the prior literature and examines this relationship in the Greek context.

PENGARUH LANGSUNG DAN TIDAK LANSGUNG KARAKTERISTIK KOMITE AUDIT TERHADAP LUAS PENGUNGKAPAN CSR MELALUI MANAJEMEN RISIKO

This study aims to examine the effect of audit committee characteristics on CSRD in manufacturing and mining sector companies listed on the Indonesia Stock Exchange (IDX) in 2019. In addition, this study also examines whether there is an effect of risk management as a mediating variable in the relationship between audit committee characteristics and CSR disclosure. This research using purposive sampling method, which result in 178 samples. The analytical tool in this research using structural equation modeling (SEM)-PLS (Partial Least Square). The results show that the characteristics of the independent audit committee, number of member meetings, financial expertise and gender diversity have a positive effect on CSRD, while the size of the audit committee has no effect on CSRD. Indirect testing shows that risk management only affects the relationship between the number of member meetings and CSRD. Meanwhile, risk management failed to become a mediator for other variables with CSRD.

The Moderating Effect of Audit Quality on the Impact of Audit Committee Characteristics and Performance: Evidence from Saudi Financial Companies

Current study aims to provide empirical evidence regarding the impact of audit committee characteristics (independence, size, meetings, and financial literacy) on the performance of financial companies. The paper also focuses on the moderating effect of audit quality on the effect of audit committee characteristics on the performance of financial companies. This study was executed on 44 unique financial companies listed in the Saudi Arabia capital market, Tadawul, over the period 2016-2018, resulting to 132 year-observations. Using pooled panel data regression, the results indicate that audit committee independence, expertise, size, and meetings significantly impact the performance of financial companies. The results also reveal that BIG4 audit firms significantly moderate the effect of audit committee size and meetings on company performance. However, the results show that BIG4 audit firms do not moderate the effect of audit committee independence and expertise on the firm performance. These results may have theoretical and practical implications regarding the audit committee characteristics used in this study, and the recommendations for future research works are also emphasized.

The Effect of Audit Committee Characteristics on Firm Performance: Evidence from Non-Financial Sectors in Oman

This study aims to observe the effect of audit committee (AC) characteristics, namely AC size (ACS), AC independence (ACI), and AC meetings (ACM) on two financial performance indicators; return on assets (ROA) and Tobin’s Q. This study was conducted on 63 non-financial firms listed on the Muscat Securities Market (MSM) in Oman for the period from 2016 to 2019. Multiple regression techniques have been applied to analyze the data and get empirical results. The findings revealed that two of the three independent variables have an insignificant effect on financial performance, and ACI has a substantial negative effect on Tobin’s Q. Based on the findings, it can be implied that the corporate governance mechanism and AC structure in Omani firms need to be improved. Stricter control government authorities may be necessary to ensure that firms appoint AC members who can enhance the firm’s performance, and contribute to the country's economic expansion.

The Impact of Chief Audit Executive’s Leadership Style and Senior Management Support for Internal Audit Function on Corporate Governance Effectiveness with the Moderating Effect of Audit Committee Characteristics: Evidence from Yemen

The objective of this paper is to determine the relationship between the Chief Audit Executive's (CAE) leadership style and senior management support for the internal audit function (IAF) as determinants of IAF quality and corporate governance (CG) effectiveness in Yemeni commercial banks. This article also investigates the extent to which the characteristics of the audit committee (AC) influence the link between CAE leadership style, support senior management for IAF, and CG effectiveness. The data was acquired using questionnaires delivered to respondents in Yemeni commercial banks, of which 158 valid questionnaires were obtained for analysis. Smart PLS 3 was used to analyse the data and test the hypotheses. The PROCESS macro approach was also utilised to evaluate the influence of AC characteristics on the association between CAE leadership style, senior management support for IAF, and CG effectiveness. An affirmative substantial correlation was found between CAE leadership style and senior management support for IAF, and CG effectiveness. Furthermore, the study found that AC characteristics favourably influence the association between CAE leadership style and CG effectiveness. However, AC characteristics do not alter the association between senior management support for the IAF and CG effectiveness. The findings improve the IAF's quality of determinants to enhance CG in developing countries, such as Yemen.

Audit Committee Characteristics and Audit Efficiency: Evidence from Nigerian Listed Deposit Money Banks

The study examines the effect of audit committee characteristics on audit efficiency of Nigerian listed Deposit Money Banks. A sample size of 11 listed banks is selected using a census technique. The study covers a period from 2006 to 2020, resulting in 165 firm-year observations. The audit efficiency is proxy using audit fee and audit delay. The data obtained is analysed using the Ordinary Least Square Method (OLS). The result shows that audit committee is positively associated with audit fee, but negatively related to audit delay. The result indicates that audit committee members recommend a reputable independent accountants to the banks, who charge a premium audit price. However, the external auditors ensure financial reporting quality by reducing the protracted audit delay. Keywords: Audit delay, Audit committee members, Audit fees, Nigeria, Banks DOI: 10.7176/EJBM/14-16-05 Publication date: August 31 st 2022

The impact of audit committee characteristics, financial performance, and listing age on greenhouse gas emission disclosures of highly emitted industry in Indonesia

Greenhouse gas or carbon emissions produced by manufacturing operations and other highly emitted industries are causes of global warming. Therefore, either in the sustainability reporting or in the corporate social and environmental reporting section, as stated in the annual report, the company usually discloses its activities related to carbon emission handling for sustainable business. In Indonesia, however, the extent of carbon emission disclosures is voluntary. The objective of this study was to investigate the effect of audit committee characteristics, financial performance, and listing age on carbon emissions reporting of highly emitted companies in Indonesia. Audit committee characteristics were measured by the number of audit committee members and the number of audit committee meetings, while Altman financial distress model measured financial performance. A checklist based on the Carbon Disclosure Project (CDP) evaluated the greenhouse gas emissions disclosures. This study uses 99 companies of highly emitted industry listed on the Indonesia Stock Exchange. Results of multiple regression analysis indicate that the number of audit committee meetings positively affects the greenhouse gas emissions report. The result suggests that the more active the audit committee in the company in conducting meetings, the higher the company’s incentives to disclose carbon emission in the company’s annual report or the sustainability reporting. The study provides insight into the regulation released by the capital market authority agency regarding strengthening factors that may influence listed companies to report their carbon emission.

Audit committee characteristics and compliance by Islamic banks with AAOIFI accounting standards

This study examines the effect of audit committee characteristics (size, independence, and expertise) on compliance with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI's) Financial Accounting Standards (FASs). Our sample consists of 372 bank-year observations from 2009 to 2015. Using panel regressions, our results provide evidence that compliance with AAOIFI's FASs is positively influenced by audit committee size. However, audit committee independence does not affect the compliance level. With respect to audit committee expertise, we find a positive and significant association between compliance with AAOIFI's FASs and accounting financial expertise. Moreover, our results reveal that audit committee members with accounting financial and culture expertise are positively and significantly associated with the level of compliance with AAOIFI's FASs. Interestingly, our finding suggests that an audit committee member with a combination of culture expertise (expertise in Islamic banking) and accounting financial expertise better improves the compliance level than an audit committee member with only accounting financial expertise.