Audit Committee Effectiveness Research Articles

Effects of Audit Quality in the Relationship between Audit Committee Effectiveness and Board Characteristics on Voluntary Disclosure Quality In (Mena) Countries

Effects of Audit Quality in the Relationship between Audit Committee Effectiveness and Board Characteristics on Voluntary Disclosure Quality In (Mena) Countries

The Effect Of Audit Committee, Firm Value, Sales Growth And Firm Size On Tax Avoidance With Corporate Transparency As A Moderating Variable

This study is a development of research entitled The Effect of Company Size, Company Value, Sales Growht on Tax Avoidance with Corporate Transparency as a Moderating Variable. It tests the food and beverage sub-sector companies listed on the Indonesia Stock Exchange for the period 2016 to 2021. Whereas in this study I will test the manufacturing sub-sector using the 2019 - 2022 financial report period. This study uses descriptive statistical analysis to describe data from 2012-2022, the objectives of this study are: To determine empirically the effect of the Audit Committee on tax avoidance, to determine empirically the effect of Company Value on tax avoidance, to determine empirically the effect of Sales Growth on tax avoidance, to determine empirically the effect of Firm Size on tax avoidance, to test the moderating effect of Corporate Transparency in the effect of the Audit Committee on tax avoidance, to test the moderating effect of Corporate Transparency in the effect of Company Value on tax avoidance, to test the moderating effect of Corporate Transparency in the effect of Sales Growth on tax avoidance, to test the moderating effect of Corporate Transparency in the effect of Firm Size on tax avoidance.

The Effect Of Audit Committee And Capital Structure On Financial Performance In Energy Sector Companies Listed On The Indonesia Stock Exchange

The purpose of this study is to obtain empirical evidence regarding the influence of independent variables consisting of audit committee size, audit committee independence, audit committee financial expertise and capital structure on financial performance. The companies used in this study are energy sector companies listed on the Indonesia Stock Exchange (IDX) from 2018-2023. The number of research samples was 17 companies with a total of 102 data that met the criteria using the purposive sampling method. The results of the study obtained are that the size of the audit committee and capital structure have a positive significant effect on financial performance. Meanwhile, the variables of the independence of the audit committee and the financial expertise of the audit committee have no effect on financial performance. This study builds on previous research by adding capital structure variables as independent variables. The implication of this research that has been carried out is to provide direction for financial managers in terms of selecting competent audit committee members and paying attention to the management of the capital structure in order to achieve the company's goals. For investors, it is best to choose a company that has an effective audit committee and a balanced capital structure.

The Effect of Profitability, Audit Opinion, Audit Committee and Company Size on Audit Delay (Study of Property and Real Estate Sector Companies Listed on the Indonesia Stock Exchange in 2021-2023)

The Effect of Profitability, Audit Opinion, Audit Committee and Company Size on Audit Delay (Study of Property and Real Estate Sector Companies Listed on the Indonesia Stock Exchange in 2021-2023)

Influence of profitability, company size, and the audit committee on earnings quality

This study aims to provide an empirical explanation of the effect of profitability, company size and audit committee on earnings quality. This study uses quantitative descriptive research with secondary data in the form of annual financial reports of food and beverage companies listed on the Indonesia Stock Exchange for the period 2018-2022. The sample selection used purposive sampling, and the number of samples used was 115 samples, and the analysis tool used was Statistical Product and Service Solutions (SPSS) 26. The analysis techniques used are descriptive analysis and multiple linear regression analysis. The results of the research indicate that profitability has no effect on earnings quality; 2) company size has no effect on earnings quality; 3) audit committee has a positive and significant effect on earnings quality; and 4) profitability, company size and audit committee simultaneously affect earnings quality.

Effect of Institutional Ownership and Audit Committee to Underpricing in Indonesian Stock Exchange

Underpricing is a phenomenon that remains unresolved. Between 2015 and 2022, 83 percent of companies listed on the Indonesia Stock Exchange (IDX) experienced underpricing. Information asymmetry is often cited as the primary reason for underpricing during the Initial Public Offering (IPO) process. The audit committee and institutional ownership are crucial indicators in reducing information asymmetry between issuers, underwriters, and investors. This study aims to examine the consistency of the application of the audit committee and institutional ownership in influencing underpricing, using a sample of 304 companies that experienced underpricing between 2015 and 2022.

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.

The audit committee effectiveness and earnings management :The moderating role of audit quality: Empirical Evidence from Egyptian listed Companies

The audit committee effectiveness and earnings management :The moderating role of audit quality: Empirical Evidence from Egyptian listed Companies

Effect of Transfer Pricing, Capital Intensity and Audit Committee on Tax Avoidance

This research was conducted with the aim of providing empirical evidence of Transfer Pricing, Capital Intensity and Audit Committees on Tax Avoidance (Case Study of Energy Sector Mining Companies Listed on the Indonesia Stock Exchange for the 2021-2022 Period). The sample selection technique was carried out using the porpusive sampling method. The total population in this study was 82 companies with a sample size of 31 companies that met the sample criteria. Data collection in this research uses secondary data obtained from the annual financial reports of companies operating in the mining industry, energy sub-sector which are listed on the Indonesia Stock Exchange for the 2021-2022 period. This research method uses a quantitative method with data testing used using SPSS version 26. The data analysis used is descriptive statistical analysis. The results of this research show that transfer pricing, capital intensity, and audit committees have a positive and significant influence on tax avoidance, such as which was tested using t test analysis and F test.

Deteksi Penipuan: Menganalisis Fraud Hexagon untuk Mendeteksi Fraud dengan Komite Audit sebagai Variabel Moderasi

The aim of this research was to examine the impact of Pressure, Capability, Opportunity, Collusion, Rationalization, and Arrogance on Financial Report Fraud, with the Audit Committee serving as a moderating variable. The study utilized library research and documentation techniques for data collection, focusing on a sample of 54 real estate sector companies listed on the IDX from 2020 to 2022. Regression Analysis was employed to analyze the data, which was secondary in nature. The findings reveal the significant influence of Pressure, Opportunity, and Collusion on Financial Report Fraud, while Capability, Rationalization, and Arrogance did not exhibit a significant effect. Additionally, the Audit Committee as a moderating variable did not significantly impact the relationships between the Fraud Hexagon factors and Financial Report Fraud. These results offer new insights into the role of the Audit Committee in fraud prevention and the application of the Fraud Hexagon model in detecting financial report fraud. The study suggests further research to explore the interactions between these factors and the effectiveness of audit committees in mitigating fraud.

The mediating role of risk management in the relationship between audit committee effectiveness and firm sustainability performance

Purpose This study aims to investigate the direct relationship between audit committee effectiveness and sustainability performance and the mediating role of risk management in the relationship between audit committee effectiveness and firm sustainability performance. Design/methodology/approach The Hayes Process regression mediation model was used in this study. The data included 2,590 firm-year observations from 518 publicly non-banking and finance companies on the Indonesia Stock Exchange from 2017 to 2021. Findings This study proves the important role of risk management in mediating the effect of audit committee effectiveness on firm sustainability performance. Audit committee effectiveness was found to positively and significantly affect risk management. However, the effect of audit committee effectiveness on firm sustainability performance was statistically insignificant. The robustness checks and additional tests support all the main regression results. Research limitations/implications Sample firms from Indonesia were used as representatives of developing countries. Further research may use more sample firms from multiple countries or provide a comparative study between firms in different countries. Practical implications The authority must enhance the audit committee’s role in risk management quality due to the indirect effect between the audit committee and sustainability disclosure. It should also expand the audit committee’s role to include sustainability disclosure. Social implications This study could increase community awareness of firm sustainability. Where a company is required to provide more eco-products, stakeholders are, therefore, expected to have more equal concerns. Originality/value To the best of the authors’ knowledge, this study is the first to examine risk management as a mediator of the effect of audit committee effectiveness on firm sustainability performance.

Impact of IFRS 9 Implementation and Audit Committee Effectiveness on Earnings Management in The Indonesian Banking Sector

Background- The implementation of IFRS 9, utilizing the Expected Credit Loss (ECL) method, along with effective oversight from the audit committee, can be a relevant strategy to anticipate earnings management practices. Purpose- to examine the impact of IFRS 9 implementation and audit committee supervision on restricting managerial discretion in loan loss provisions. Design/methodology/approach- This study will use a quantitative analysis method using secondary data from an annual report. The sampling method used in this study was purposive sampling, which resulted in selecting 42 banks listed on the Indonesian Stock Exchange from 2017 to 2022. This study uses the data panel analysis method with the STATA analysis tool. Findings- This research found that the implementation of IFRS 9 and audit committees had an impact on increasing bank managerial discretion. This explains that the implementation of IFRS 9 and the audit committee have not been able to limit managerial discretion, which may be due to the influence of unstable economic conditions due to the pandemic and countercyclical policy to anticipate the impact of the pandemic. Research limitation- The potential impact of the COVID-19 pandemic on research outcomes related to managerial discretion and the effectiveness of audit committee oversight. Originality/Value- To enhance the literature related to the trends of the impact of PSAK implementation in Indonesia on earnings management more comprehensively by extending the research period and contributing to the literature by employing multiple criteria to identify the quality of oversight provided by the audit committee.

Does Sustainability Assurance enhance the connection between Corporate Governance and Firm Performance in India?

Scholarly attention to the association between corporate governance and firm performance, considering sustainability assurance as a moderator is scarce. This study aims to examine the moderating role of sustainability assurance in the nexus between corporate governance and firm performance in India. The data relating to 35 environmentally sensitive companies among the top 100 National Stock Exchange (NSE) listed entities were gathered from the ProwessIQ Database and annual reports of companies during 2016–2022. The fixed effect regression model was employed. The results show an insignificant effect of board effectiveness on firm performance as measured by return on assets (ROA), return on equity (ROE), and Tobin’s Q. Similar findings were documented on the audit committee effectiveness and firm performance nexus, except for Tobin’s Q (β = 0.316). In addition, the study did not support the moderating role of sustainability assurance on the board effectiveness and firm performance nexus, indicating the presence of ineffective corporate governance mechanisms. However, the results show that sustainability assurance significantly and negatively moderates the relationship between audit committee effectiveness and ROA (β = –0.021), ROE (β = –0.074), and Tobin’s Q (β = –0.996). This implies that the practice of external assurance of sustainability reports by firms with audit committee effectiveness is an additional burden due to the extra cost involved. Further, the result indicates the learning curve effect among Indian companies. Thus, the findings suggest the need for regulatory focus on encouraging sustainable business practices in terms of effective corporate governance and sustainability assurance. AcknowledgmentThe authors are grateful to Manipal Academy of Higher Education (MAHE), Manipal, for providing financial assistance in the form of a “JRF Contingency Grant” for this research article.

How effective is corporate governance in preventing financial fraud in Indonesia Kompas100 firms?

This study examines the relationship between corporate governance practices and the incidence of financial fraud among firms listed on the Kompas100 Index in Indonesia. Utilizing a panel dataset of 1,000 companies over the period from 2015 to 2023, the research employs a Fixed Effects Model (FEM) to analyze the impact of key governance variables, including board composition, ownership structure, and audit committee effectiveness, on fraud occurrence. The findings reveal that firms with a higher proportion of independent directors and more effective audit committees are less likely to engage in financial fraud. Conversely, concentrated ownership and higher leverage are associated with an increased likelihood of fraud. These results underscore the importance of robust governance mechanisms in preventing fraud, particularly in the context of Indonesia's evolving corporate landscape. The study also discusses the limitations of the research and offers policy recommendations to strengthen corporate governance frameworks, thereby enhancing the integrity of Indonesia's financial markets.

Pengaruh Komite Audit, Biaya Lingkungan, Modal Intelektual, Likuiditas, dan Pertumbuhan Perusahaan terhadap Kinerja Keuangan Perusahaan

This study aims to determine the effect of audit committees, environmental costs, intellectual capital, liquidity and company growth on company financial performance in food and beverage sector companies listed on the Indonesia Stock Exchange for the 2019-2023 period totaling 126 companies. The data used in this study were obtained from financial report data and annual reports. The population in this study were food and beverage sector companies listed on the Indonesia Stock Exchange. The sampling technique used was the purposive sampling method and 160 sample data were obtained from 32 companies. The analysis technique used in this study is multiple linear regression analysis using IBM SPSS Statistics. The results of this study indicate that environmental costs and company growth have a positive and significant effect on the company's financial performance, while the audit committee, intellectual capital, liquidity do not affect the company's financial performance.

Audit committee attributes and audit report timeliness of quoted manufacturing firms in Nigeria

The study examined the effect of audit committee attributes on audit report timeliness in quoted manufacturing firms in Nigeria. Other specific objectives were to: assess the effect of audit committee independence and audit committee size, on audit report timeliness in quoted manufacturing firms in Nigeria over the period of 2017-2022. This study adopted quantitative research design. The study selected four listed manufacturing firms in Lagos were Unilever Nigeria PLC, Nigeria Breweries PLC, UAC Foods PLC and Cadbury Nigeria PLC. The data analytical techniques were descriptive statistics, correlation analysis and Generalized Panel Ordinary Least Squares (GLS). The empirical result showed that audit committee independence has positive and significant impact on audit report timeliness in quoted manufacturing firms in Nigeria (t-statistic; 2.9267; P-value; 0.0043 < Sig-value; 0.05); audit committee size has positive and significant impact on audit report timeliness in quoted manufacturing firms in Nigeria (t-statistic; 2.9267; P-value; 0.0043 < Sig-value; 0.05). The study recommends that management of manufacturing firms should board should be on the bases of age and experience not on friendship since it positively relates to performance and to the probability of disciplinary management turnover in poorly performing manufacturing firms.

Analisis Faktor-Faktor Yang Mempengaruhi Audit Delay Pada Perusahaan Manufaktur Periode 2016-2020

Audit reports are important for stakeholders and management. For management, it is required to submit financial reports that are in accordance with financial accounting standards and have been audited by a public accountant registered with BAPEPAM. The issuance of financial reports will expedite the process of publishing financial statements. As for the timeliness of the publication of financial reports to be published, it will affect the timeliness of decision making. The purpose of this study was to determine and analyze the effect of company size, solvency, profitability, and audit committee on audit delay. The company population is all manufacturing companies in 2016-2020 and the research sample is 10 companies. The data used is secondary data in the form of financial report documentation and company annual reports obtained from the IDX. The results of the study, namely partially, show that the variables that influence audit delay are company size and profitability (ROA). The significance level of these variables is 0.022 and 0.034. While the solvency and audit committee variables have no effect. The test results simultaneously show that all variables have a significant effect on audit delay.

Meningkatkan Kualitas Laba Melalui Corporate Governance

This study aims to examine the effect of independent commissioners, audit committees, and managerial ownership on earnings quality. This study uses three control variables, namely firm size, profitability, and leverage. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2019-2021. Sampling using purposive sampling technique produces 182 data. The results obtained indicate that managerial ownership has a significant positive effect on earnings quality. Ownership of shares owned by directors is considered capable of providing oversight of performance between agents and management. In contrast, independent commissioners and audit committees have no effect on earnings quality. This is because the supervision carried out by independent commissioners and audit committees is considered less than optimal. For the variable firm size, profitability, and leverage have a significant positive effect on earnings quality.

Corporate governance effectiveness and firm performance in global crisis: evidence from GCC countries

Purpose This study aims to examine the impact of corporate governance (CG) effectiveness measured by board and audit committee index on firm performance of nonfinancial listed firms in Gulf Cooperation Council (GCC) countries, pre- and during the global crisis of COVID-19. Design/methodology/approach The analysis used 2,238 observations from nonfinancial firms listed on GCC countries' stock exchange, covering the period from 2017 to 2022, using a fixed effect panel regression model. The data for this study were manually collected from the annual reports of 373 GCC-listed firms. Findings The results demonstrate that the board's effectiveness index has a positive influence solely on accounting-based performance (return on assets) pre- and during the COVID-19 crisis. However, in terms of audit committee effectiveness, the results show a positive impact on market-based performance (Tobin’s Q) both pre- and during the COVID-19 crisis. Additional analysis indicates that the effectiveness of both the board and audit committee is more notable in larger firms compared to smaller firms. Practical implications This study is crucial for investors, regulators, managers and governments tackling the financial impacts of global crises like COVID-19. Its comprehensive evaluation of board and audit committee effectiveness guides policymakers and practitioners in enhancing CG for profit and wealth maximization. Originality/value This study offers novel evidence detailing the impact of CG effectiveness on firm performance over an extended period, encompassing the COVID-19 period and using a comprehensive index. In addition, this study was conducted in a unique CG setting, focusing on six emerging GCC countries.

Do Key Audit Matters Mediate Earning Management

Earnings management is the management of cash in or income and cash out or expenses so that businesses can generate net income. The purpose of this study was to determine the effect of key audit matters on earnings management mediated by audit quality, financial audit committee effectiveness. This research uses quantitative research methods. The data collection method of this research uses documentation techniques. The population used in this study are all companies listed on the Indonesia Stock Exchange obtained from the official IDX website, namely https://www.idx.co.id and the company's website in 2022, totaling 825 companies. The method used in sampling is purposive sampling method. The data analysis method used is a combination of descriptive analysis and quantitative analysis. The results showed that audit quality, effectiveness, financial audit committee mediate the effect of key audit matters on earnings management.