Audit Committee Independence Research Articles

Karakteristik Komite Audit dan CSR Disclosure di Infrastructure- Konstruksi Non BUMN

This research empirically tests the influence of audit committee characteristics, namely audit committee independence, audit committee size, expertise, audit committee finances, audit committee meeting frequency, audit committee gender differences on the quality/extent of corporate social responsibility disclosure for the 2018-2022 period. The dependent variable used in this research is the extent of corporate social responsibility disclosure. This research uses quantitative research methods with secondary data obtained from annual reports of non-BUMN infrastructure and construction industry companies listed on the IDX. There are 150 data from 30 companies selected as research samples based on the purposive sampling method. Data processing in this study was tested using Eviews 12 Student Version Lite. The results of this research show that the independence of the audit committee, the financial expertise of the audit committee and the frequency of audit committee meetings have a significant positive effect on the extent of CSR disclosure. Meanwhile, audit committee size and audit committee gender differences have no influence on the extent of CSR disclosure.

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.

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.

Pengaruh Independensi Dan Gender Komite Audit Terhadap Audit Delay

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

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

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

Impacts of corporate governance attributes on audit quality in emerging economies: The case of India

Purpose The present study examines the impact of corporate governance attributes on audit quality in the context of an emerging market, India. The study is based on data from 100 non-financial firms listed on the Bombay Stock Exchange randomly selected from the list of BSE 500 firms on 31 March 2021 for 2017–2021. Aim To measure audit quality using two input-based measures – audit fee and audit firm size (Big-4 or non-Big-4). Design/Methodology/Approach This study uses logistic regression and panel data regression models to investigate the impact of corporate governance variables on audit quality after controlling for some firm-specific variables. Furthermore, a generalised estimating equation model is used to check the robustness of the logistic regression model results. Main findings The results indicate that board independence, board gender diversity, multiple directorships, and audit committee independence positively correlate with audit quality. However, the board size, role duality, and promoter shareholding are negatively associated with the audit quality. Further, the quantile regression results indicate heterogeneous impacts of role duality and promoters’ shareholding on audit quality. Practical implications First, firms with the concentration of power in the hands of promoters directly or indirectly may engage Big-4 auditors to enhance AQ. Second, policymakers should take appropriate steps to enhance the gender quota as per international norms to improve the quality of financial reporting. Third, firms' should capitalise on the enhanced advisory capability of the directors having exposure and association with other companies. Novelty/Contribution The study enriches the existing literature by providing empirical evidence from an emerging nation characterised by the dominance of promoters’ shareholding, busy boards, and role duality.

PENERAPAN MEKANISME CORPORATE GOVERNANCE TERHADAP KINERJA PERUSAHAAN PERBANKAN DI INDONESIA

This research aims to examine the influence of corporate governance mechanisms on company performance. The sample for this research is banking companies listed on the IDX in 2019 - 2021. Data was taken from the company's annual report. Four corporate governance variables, namely the size of the board of directors, the size of the board of commissioners, managerial ownership, and the independent audit committee are used to explain company performance. Regression analysis is used to test the influence of corporate governance mechanisms on company performance. Based on the results of multiple regression analysis, it shows that the size of the Board of Directors and Independent Internal Auditors has a significant effect on banking company performance, while the Size of the Board of Commissioners and Managerial Ownership do not have a significant effect on performance. banking companies listed on the Indonesian Stock Exchange

PENGARUH FINANCIAL DISTRESS DAN CORPORATE GOVERNANCE TERHADAP KECEPATAN PUBLIKASI LAPORAN KEUANGAN TAHUNAN

The matter of submitting annual financial reports on time greatly affects the quality of the financial report itself. Financial reports are said to be of quality when information is presented on time and available when needed. The purpose of this study is to determine whether the condition of financial distress and the form of corporate governance of a company affect the speed of publication of annual financial reports. The study was conducted on companies engaged in the property and real estate sector and listed on the Indonesia Stock Exchange in 2021-2022. The purposive sampling technique was used to select samples with a total of 140 samples. The data in the study are secondary data. The data analysis technique is multiple linear analysis. The results of the study show that financial distress and corporate governance represented by managerial ownership and audit quality do not affect the speed of publication of annual financial reports. Meanwhile, corporate governance represented by independent commissioners, institutional ownership and audit committees have a negative effect on the speed of publication of annual financial reports

The Role of Corporate Governance in Shaping IFR Practices of Listed Companies in Sri Lanka

Objective – This study investigates the relationship between corporate governance characteristics and Internet Financial Reporting (IFR) in the context of listed companies in the Colombo Stock Exchange (CSE).Design/Methodology – The key metrics for assessing corporate governance characteristics include board size, independence, CEO duality, women in the board, audit committee independence, and ownership concentration. These data were derived from the published annual reports. Employing content analysis, the study measures IFR disclosure using secondary data from the published annual reports of 201 listed companies in Sri Lanka.Results – The mean value of listed companies' IFR disclosure is 50.66% in Sri Lanka. Regression results show that audit committee independence and ownership concentration significantly impact the IFR. However, no statistical evidence supports other variables' significant impact on IFR.Research limitations/implications – This study relies upon only 201 listed firms’ data for a financial year in Sri Lanka and the statistical model includes only five corporate governance-related variables. The study's findings contribute to the reform of corporate governance practices, corporate governance literature, and information asymmetry theory. Moreover, results have practical implications for the composition of the board and audit committee.Novelty/Originality – This study contributes to the existing literature and lays the groundwork for future research by providing new insights into the adoption of IFR practices in Sri Lanka and other similar nations. Examining the impact of corporate governance on IFR practices in listed firms within a developing country sheds light on the significance of corporate governance and IFR.

Pengaruh Corporate Governance dan Corporate Social Responsibility Disclosure Terhadap Tax Avoidance pada Perusahaan Tambang di Bursa Efek Indonesia Periode 2019–2021

This study aims to analyze and determine the effect of corporate governance and corporate social responsibility disclosure on tax avoidance in mining companies listed on the Indonesia Stock Exchange (IDX) for the 2019-2021 period. Data collection techniques used are websites and documentation. The type of data is quantitative data with secondary data sources. The population used in this study are mining companies listed on the Indonesia Stock Exchange for 2019–2021 with a total of 47 companies by purposive sampling, so the number of samples is 11 companies x 3 years = 33 financial reports. The data analysis method in this study uses multiple linear regression analysis, the coefficient of determination, and hypothesis testing T-test and F-test. The results of this study indicate that: 1. The proportion of independent commissioners (KIND) partially has a significant positive effect on company tax avoidance (TAX) mines listed on the Indonesia Stock Exchange (IDX). 2. Partial institutional ownership (KI) has no significant effect on the tax avoidance (TAX) of mining companies listed on the Indonesia Stock Exchange (IDX). 3. Managerial ownership (KM) partially has a significant negative effect on the tax avoidance (TAX) of mining companies listed on the Indonesia Stock Exchange (IDX). 4. The audit committee (KA) partially has a significant positive effect on the tax avoidance (TAX) of mining companies listed on the Indonesia Stock Exchange (IDX). 5. Corporate social responsibility disclosure (CSRD) partially has a significant positive effect on the tax avoidance (TAX) of mining companies listed on the Indonesia Stock Exchange (IDX). 6. The proportion of Independent Commissioners (KIND), Institutional Ownership (KI), Managerial Ownership (KM), Audit Committee (KA), and Corporate Social Responsibility Disclosure (CSRD) simultaneously have a significant positive effect on tax avoidance (TAX) of registered mining companies on the Indonesia Stock Exchange (IDX).

Pengaruh Tata Kelola Perusahaan, Pelaporan Keberlanjutan, dan Koneksi Politik terhadap Penghindaran Pajak

The purpose of this study is to examine the effect of corporate governance, sustainability reporting, and political connections on tax avoidance practices. The data used in the study involves data derived from the financial statements of companies in the infrastructure sector listed on the Indonesia Stock Exchange for the period 2020 to 2022. Information is obtained through the page www.idx.co.id and from the website of each company. The method applied in the research is quantitative method, using purposive sampling data collection technique. While the number of samples selected for this study was 30 observations. The research findings show that corporate governance represented by independent commissioners and audit committees, as well as sustainability reporting has a negative effect on tax avoidance.

Military connections, corporate governance and corporate tax avoidance

PurposeThis paper aims to investigate the relationship between military connections and tax avoidance in Indonesia. Further, the paper examines whether the relationship between military connections and tax avoidance is impacted by three corporate governance variables: auditor size or Big 4, board size and audit committee independence. Indonesia's settings allow for a unique investigation, as military involvement has been documented.Design/methodology/approachThis paper uses Indonesia as the research setting because its military forces have a long history of business involvement. The sample includes 1,986 firm-year observations on the Indonesia Stock Exchange from 2010 to 2018. The period signifies the time of significant change post-Suharto to illustrate changes in military reform.FindingsMilitary-connected firms recorded a negative relationship with effective tax rates, indicating higher tax avoidance. The authors extend this test by considering three corporate governance variables: Big 4, board size and audit committee independence. They find the corporate governance variables are ineffective in mitigating the positive impact of military-connected firms and corporate tax avoidance. The results remain consistent when performing endogeneity tests.Originality/valueThis paper adds to the extant literature by examining the impact of military connections on tax avoidance. The findings reflect Indonesia's institutional settings depicting military and political connections.

The Impact of the Corporate Governance Mechanisms on Insurance Risk: Perspective from Insurance Industry

Abstract This study examined the correlation between corporate governance mechanisms and insurance risk in Ethiopian insurance companies. The study employed various multivariate regression approaches, including fixed effects, random effects models, and two-step system GMM. The study analyzed 136 observations from 17 insurance firms, with one omitted due to lack of data. The research used two regression models to examine the link between corporate governance mechanisms and insurance risk. Having independent directors on the board was discovered to have a notable and unfavorable influence on operational risk, whereas the size of the board did not impact operational or liquidity risk. The frequency of board meetings did not show a significant relationship with operational risk, but it did have a notable positive correlation with liquidity risk. Audit committees were found to have a negative and significant influence on both operational and liquidity risk. Gender diversity on the board had an insignificant but negative effect on insurance risk, mainly operational risk. Overall, the study emphasized the importance of independent directors and audit committees in managing risk in Ethiopian insurance companies. This research provides valuable insights for academic policymakers, such as the National Bank of Ethiopia, insurance companies, and other organizations.

THE ROLE OF AUDIT COMMITTEE ATTRIBUTES IN ENHANCING OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE DISCLOSURE STANDARDS

This research aims to evaluate how the characteristics of the audit committee contribute to the enhancement of environmental, social, and governance (ESG) reporting standards. The audit committee's contribution is assessed through financial acumen, scope, autonomy, and the regularity of its meetings. This study does not only focus on certain industries but all industries with ESG scores that are routinely assessed by Bloomberg for the 2017-2021 period in Indonesia except the financial industry. The sample comprises of 67 companies, so that the total observations used are 335 firm-years with fixed effect model data panel analysis. The findings imply that the independence of the audit committee's independence has a notably positive impact on the quality of ESG disclosures. Meanwhile, the frequency of audit committee meetings has a notably negative impact on the quality of ESG disclosures. However, financial expertise and the size of audit committee do not correlate to the quality of ESG disclosures. The sensitivity analysis supports the entire result of the hypothesis test. Sensitivity tests were carried out on each of the ESG components, namely Environmental, Social and Governance.

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.

Pengaruh Dewan Direksi, Komite Audit, dan Kepemilikan Asing Terhadap Kinerja Keuangan

This study aims to determine the effect of the board of directors, audit committee and foreign ownership on financial performance in consumer cyclicals sector companies listed on the IDX in 2014-2022. The sampling technique used purposive sampling and obtained 37 companies. This study uses quantitative data and the research method uses regression analysis using the STATA application. The results of this study indicate that the board of directors and audit committee have a positive effect on financial performance, but foreign ownership with a level of 21% has a negative effect on financial performance. The results of this study are practically useful for knowing the more in-depth functions of the independent board of directors, independent audit committee, and foreign ownership and utilizing these variables to improve the company's financial performance.

Beyond Compliance: How ESG Reporting Influences the Cost of Capital in UK Firms

This research examines the effect of ESG disclosure on the cost of capital for non-financial firms in the UK, indexed by the FTSE All-Share Index, during the period from 2014 to 2018. Using multivariate analysis with ordinary least squares (OLS), fixed effects, robust regression, and Tobit models, this research assesses the effect of ESG reporting, governance, and the cost of capital, including robustness checks using an alternative ESG indicator, the environmental pillar score. Contrary to expectations, ESG reporting is positively associated with the cost of capital. However, corporate governance moderates this relationship, weakening the positive correlation and reversing it to a negative association for firms with strong governance practices, consistent with the hypotheses. This research also finds that firm size, liquidity, profitability, and leverage, positively affect the cost of capital, while board size, independent board composition, audit committee independence, and auditor type do not significantly influence it. Notably, non-executive directors on the audit committee have a significant negative effect on the cost of capital. These findings are valuable for investors, companies, regulators, auditors, policymakers, and the academic and research community. Specifically, for investors, this study provides insights into how ESG disclosures can influence investment risks and returns, highlighting the importance of robust corporate governance. Companies can leverage these insights to enhance their governance practices and optimize their capital costs. Regulators and policymakers can use the findings to develop guidelines that encourage transparent ESG reporting and strong governance frameworks, thereby improving market stability and investor confidence. Auditors can utilize the results to better understand the effect of non-financial reporting on financial metrics, helping to provide more accurate audits and assessments. These findings inform investors, companies, regulators, auditors, and academia, in fostering a more sustainable and transparent financial environment.

The impact of corporate governance on firm performance: panel data evidence from S&P 500 Information Technology

This research is important for both the academic and business environments due to the extraordinary results obtained. Additionally, the significance of the study is also attributed to the addressed topic, which is intensively studied in the world of corporate finance. The primary aim of this research is to scrutinize a cohort of 66 information and technology (IT) companies, all of which are constituents of the American Standard and Poor’s 500 Index (S&P 500). The study period spans two decades, covering the years 2003–2022. To summarize the outcomes, the analytical framework incorporated linear models with both fixed (fe) and random effects (re), as well as quantile regression models. This study's key outcomes highlight that firm size, sales growth, current ratio, long-term debt to capital, free cash flow, asset turnover and receivable turnover, board meeting frequency, female board representation, chief executive officer age, audit committee independence, and the presence of compensation and nomination committees, alongside a pandemic indicator, positively impact firm performance. Conversely, firm age, dividend payout ratio, effective tax rate, board size, chief executive officer duality, and corporate social responsibility committee presence have negative effects on performance. Also, regarding quantile regressions, CEO duality significantly influences companies with high profitability rates, and companies with low to medium profitability rates are more strongly and negatively influenced by board size. The implications of the core policy in this research focusing on corporate governance will consider certain rules and guidelines regarding financial transparency and protecting shareholders' interests. Additionally, it will take into account the independence of the board of directors and the presence of its committees, as well as ethical leadership practices.

The moderating role of board gender diversity on the association between audit committee attributes and integrated reporting quality

PurposeThe main objective of the research is to examine the influence of audit committee attributes on the integrated reporting quality (IRQ) and to investigate whether this association is moderated by board gender diversity in the manufacturing and non-manufacturing sectors. The study specifically investigates the association between audit committee independence, meetings frequency, financial expertise, audit committee size, and integrated reporting quality.Design/methodology/approachThe data collection was from the financial statements and corporate governance reports of 54 Egyptian firms listed on the stock market [EGX100] for the period of 2018–2022. The study used pooled effect modelling and performed data analysis using the STATA software.FindingsFor the manufacturing sector, the results showed a significant impact of audit committee independence and meetings frequency on IRQ, while audit committee size and financial expertise showed insignificant association with IRQ. Board gender diversity moderates the association between audit committee meetings only and IRQ. In contrast, audit committee financial expertise and meetings frequency significantly impact IRQ, while audit committee independence and size showed an insignificant impact on IRQ in the non-manufacturing sector. Also, board gender diversity moderates the association between audit committee and IRQ. The findings highlight the significance of AC attributes and provide guidance to firms to strengthen their audit committees in order to provide high quality of integrated reports to increase investor trust in the Egyptian business environment as it is now mandatory by the government.Originality/valueThis research offers unique perspectives on the association between variables in Egypt. This study is one of the first investigations on the impact of audit committee attributes and board diversity on integrated reporting quality within the context of Egyptian listed companies. Comprehending the ways in which audit committee attributes impact the integrated reporting quality in the manufacturing and non-manufacturing sectors can enable organizations to devise focused approaches that comply to the unique operational, regulatory, and investor demands in each sector.

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.