Influence Of Audit Committee Characteristics Research Articles

Does Audit Committee Influence Integrate Reporting Quality? Empirical Evidence from Emerging Market

Integrated reporting is the latest novelty in the corporate reporting field. An integrated report represents and clarifies the financial and non-financial performance of the company, environment, society, and governance, and helps in compiling information that are appropriate with the performance and impact of the company to give a clear and comprehensive picture of the opportunities and risks that may face the company that leads to the creation of value (IIRC, 2021). IR involves merging non-financial and financial information in the corporate annual report which provides investors and stakeholders a holistic picture of management's view on sustainability initiatives, governance, social, and economic (Ahmed Haji & Anifowose, 2016; Churet & Eccles, 2014; Darus et al., 2019; Hamad et al., 2020). Furthermore, IR is often known to be a higher quality reporting that establishes ties between a company's societal, environmental, and economic aspects (Adhariani & de Villiers, 2019; Dilling & Caykoylu, 2019; Qaderi et al., 2021; Stubbs & Higgins, 2014; Vitolla et al., 2020). Previous studies have extensively investigated IR adoption (Darus et al., 2019; Ghani et al., 2018; Hamad et al., 2020; Masduki & Mohd Zaid, 2019; Qaderi et al., 2021; 2022). However, there are limited papers investigating the IR quality (IRQ) in Malaysia. Due to this considerable gap in the research, it is vital to investigate the main factors that can explain the quality of integrated reporting in Malaysia. Studies by Alzeban (2020) and Hassan et al (2019) show that audit committee contributes to corporate reporting quality due to its significant role in internal control mechanism of a company. Therefore, the objective of this research is to investigate the influence of audit committee characteristics on integrated reporting quality. Keywords: Integrated reporting quality, audit committee, Malaysia

KARAKTERISTIK KOMITE AUDIT DAN RISIKO PENGAMBILAN KEPUTUSAN PADA BANK SYARIAH PERIODE 2013-2020

The purpose of this study was to analyze how the influence of audit committee characteristics, namely audit committee size, audit committee independence, audit committee meetings, audit committee educational background, audit committee age, and audit committee gender at decision-making risk proxied by NPF in Islamic Banks in the 2013 period -2020. This study used a purposive sampling technique with 11 samples of Islamic banks. The results showed that audit committee size had a positive effect on decision-making risk, audit committee independence damaged decision-making risk, audit committee meetings damaged decision-making risk, the educational background damaged decision-making risk, the age of the audit committee had a positive effect on decision-making risk, and the gender of the audit committee damaged decision-making risk.

Determinants of Banking Sector Audit Report Lag: Evidence from Indonesia

The main purpose – This study aims to examine the influence of audit committee characteristics, reputation of public accounting firms, and the COVID-19 crisis on the Audit Report Lag (ARL) of the banking sector in Indonesia..Method - This study uses annual panel data from 40 banks listed on the Indonesia Stock Exchange for the 2014-2021 period. The analytical method used in this study is the Random Effect Model.Main Findings – The results show that the frequency of audit committee meetings and the reputation of the public accounting firm have a negative effect on the ARL of the banking sector in Indonesia. Meanwhile, the COVID-19 crisis had a positive effect on the ARL of the banking sector in Indonesia. However, the research failed to prove the influence of the size of the audit committee and women's audit committee on the ARL of the banking sector in Indonesia.Theory and Policy Implications – This research contributes to the development of corporate governance literature on the relationship between the characteristics of audit committees and the reputation of public accounting firms and the ARL of the banking sector, in times of crisis such as the COVID-19 pandemic. This research adds insight for bank regulators, investors, and other business people about the factors that affect the ARL of the banking sector in Indonesia, which allows them to control the ARL more effectively.Novelty – This study is one of the first to consider women's audit committees, the reputation of public accountants, and the COVID-19 crisis in relation to the ARL of the banking sector, particularly in Indonesia. Keywords - Audit report lag, audit committee characteristics, public accounting firm reputation, COVID-19 crisis, Indonesian banking sector.

Audit Committee Characteristics and Quality of Financial Reporting In State Corporations in Kenya

The study sought to assess the influence of audit committee characteristics on the quality of financial reporting in state corporations in Kenya. Audit committees are created with a sole purpose of affirming the trust towards the company’ integrity in the hearts of the stakeholders in regard to the internal procedures; the exercise by the committee gives the stakeholders’ confidence in matters oversight assigned to the committee. Specifically, the study sought to examine the effect of audit committee expertise and audit committee independence on quality of financial reporting among state corporations in Kenya. An explanatory research design was employed to attain the study's purpose. The study's target population was the 187 government-owned enterprises in Kenya. A sample of 127 firms was selected using a stratified random sampling. A structured questionnaire was utilized to collect data. The data was analysed through descriptive and inferential statistics using the SPSS software. The findings from the study revealed that audit committee expertise has a significant influence on the quality of financial reporting in state corporations. The findings further revealed that the independence of the audit committee had a significant and positive influence on the quality of financial reporting in state corporations in Kenya. The study concluded that through the independence, and expertise of the audit committees, state corporations in Kenya had better quality of the financial reporting. It is therefore recommended that the government through the respective agencies upholds the independence and expertise of the audit committees in order to enhance their ability to deliver appropriate quality of the financial reporting in the corporations.

Does audit committee characteristics a driver in risk disclosure?

Risk disclosure is one of the practices of corporate governance. Disclosure of risk is an important aspect of a company’s financial reporting since it provides information on how various risks can occur, the company’s response to these risks, and the impact these risks have on the company’s future. By sharing risk information, the corporation has attempted to be more transparent in delivering information to its stakeholders. Based on risk disclosure information, stakeholders are anticipated to make better judgments. This study aimed to examine the influence of audit committee characteristics on risk disclosure. This analysis includes 202 bank statements from 2017 to 2021, the observation period for banks listed on the Indonesia Stock Exchange. Regression was used for data extracted from annual reports, corporate governance reports, and company websites. The results demonstrated that the audit committee’s expertise positively impacted risk disclosure. Risk disclosure is unaffected by the size and frequency of the audit committee. The audit committee plays a crucial role in providing information regarding risks; therefore, the corporation must pay close attention to the audit committee’s quality. The knowledge of audit committees with a background in accounting or financial education can promote risk disclosure.

The influence of audit committee on the relationship between corporate social responsibility disclosure and tax aggressiveness: evidence from French context

The objective of this study is to investigate the impact of audit committee characteristics on the relationship between corporate social responsibility disclosure and tax aggressiveness. Based on 72 French listed firms SBF 120 for the years ranging 2010 to 2017.The level of tax aggressiveness is measured across the effective tax rate (ETR). The authors find that measures of independent, expertise and size of audit committee are significantly related to tax aggressiveness. This research contribution to the literature reveals the influence of audit committee characteristics on the Relationship between corporate social responsibility disclosure and the level of tax aggressiveness in French context given that in recent years, the fight against aggressive tax practices has been among the primary objectives within the framework of the European Union (EU).

Impact of Attributes of Audit Committee on Productivity of Intellectual Capital (Empirical Evidence from Pakistan)

Aim of this research is to find whether there exists an impact of audit committee characteristics on the intellectual capital of banks in the developing country Pakistan. In this study the independent variable audit committee characteristics contain three components that are independence, size, and meetings while the dependent variable is efficiency of intellectual capital which is measured using modified value-added intellectual coefficient (MVAIC) approach and the control variables utilized in the paper are bank specific. The sample contains 28 banks and total number of observations are 308 which contains data for time period 2010 to 2020. Audit committee helps in improving internal control by overseeing management decisions ultimately resulting in enhancing an institutions overall efficiency. The findings of the paper disclosed that there is a significantly positive influence of audit committee characteristics on intellectual capital efficiency of banks. The outcomes deduced from the research could provide further insights on the association between components of audit committee and intellectual capital efficiency which will be of significance for managers in making decisions regarding AC composition in order to increase IC in developing nations.

The Role of Audit Committee Characteristics and I.C. Performance on I.C. Disclosure: Evidence from the Indonesian Banking Sector

This study aims to analyze the influence of audit committee characteristics and intellectual capital performance on intellectual capital disclosure. Characteristics of the audit used in this research are the size of the audit committee, the Number of audit committee meetings, and the financial expertise of the audit committee. The population in this study is a financial services company listed on the Indonesia Stock Exchange in 2019–2021 and collected a sample of 91 companies using the purposive sampling technique. The analysis method used in this research is multiple linear regression using the software SPSS 20. The test result of this study shows that an audit committee or several audit committees positively affect intellectual capital disclosure. However, at the same time, the financial expertise of the audit committee and intellectual capital performance does not affect intellectual capital disclosure.

The influence of audit committee characteristics on the ethical disclosure of sharia compliant companies

The influence of audit committee characteristics on the ethical disclosure of sharia compliant companies

The Influence of Audit-Committee Characteristics on the Association between Corporate Social Responsibility and Earnings Quality

Corporate social responsibility (CSR) activities are affected by the national system, and the social and cultural environment to which a firm belongs. This study investigates whether the characteristics of an audit committee (AC) such as independence, expertise, activity, or power influence the relation between CSR and earnings quality for Korean firms. Multivariate regression analysis is used to identify the effect of AC characteristics on the relation between CSR and the earnings management of firms with CSR excellence, as well as whether their contribution enhances the quality of earnings of firms that actively engage in CSR practices. The results show that when ACs are active, earnings management using the discretionary accruals of firms that participate in CSR activities with an ethical motive is more tightly constrained. ACs are more effective when they have independent directors, accounting expertise, active participation, and relative power. The findings suggest that ACs have a positive effect on the financial reporting quality of firms with high levels of CSR. Furthermore, active ACs are crucial for improving the quality of earnings, which is further enhanced when ACs have a variety of superior characteristics.

The influence of audit committee characteristics on investment in internal audit: the moderating role of family ownership

This paper examines the influence of audit committee (AC) characteristics on investment in internal audit function (IAF) in Malaysia. Furthermore, the moderating role of family ownership on the relationship between investment in IAF and AC characteristics was examined in this study. A balanced panel data was employed. The data was obtained from the annual reports of the top 150 public listed companies in Bursa Malaysia from 2011 to 2019. The findings shows that investment in IAF is positively related to the frequency of AC meetings, but negatively related to the presence of accounting expert, percentage of independent directors and the average tenure of AC members. Also, the findings show that family ownership moderates the relationship between the characteristics of AC and investment in IAF. This result has implications for policymakers as the study suggest that IAF and AC are important corporate governance mechanism in ensuring quality of financial reporting.

The Influence of Audit Committee Characteristics on Voluntary Disclosure of Annual Financial Reports in Jordan

This study examines the influence of audit committee characteristics on voluntary disclosure of non-financial firms considering the context of Amman stock exchange (ASE). As a result, a total number of 140 firms were annually considered as study samples between 2015 and 2019 making up to 4 years reports. To measure the impacts of audit committee on information of voluntary disclosure, a number of hypotheses were tested from selected firms listed in Jordan. On the test for hypotheses, a descriptive analysis was carried out followed by the model of multiple regressions. The outcome from the findings in this study however indicated a positive relationship between the factors of independent audit committee, the sizes, the multiple directorships of members of audit committee and the corporate voluntary disclosure. The rate at which meetings were held by financial expertise and members of audit committee was observed to be associated significantly with the corporate voluntary disclosure. The results further revealed a strong significance difference between investors in accounting sector and policy makers and the accuracy of monitoring the process of corporate reporting. The current research however projected foresight ideas to improve corporate governance of Jordan and other developing countries with the tendency of imposing reliable regulation bodies.

The Influence of Audit Committee Characteristics on Investment in Internal Audit: The Moderating Role of Family Ownership

The Influence of Audit Committee Characteristics on Investment in Internal Audit: The Moderating Role of Family Ownership

Impact of audit committee characteristics and external audit quality on firm performance: evidence from India

PurposeThe purpose of this paper is to analyse the influence of audit committee characteristics and external audit quality on the performance of non-financial public limited companies listed on the National Stock Exchange 100.Design/methodology/approachOne-way random effect panel data regression was applied to 74 non-financial firms in the Nifty 100 from 2014 until 2019. The overall audit committee index and external audit index were built based on the new Indian Companies Act, 2013 and on a review of the literature to capture the impact of the new Act on firm financial performance.FindingsThe outcome of the study revealed that there is lack of evidence to show that audit committee characteristics improve the performance of top Indian non-financial listed firms. However, external audit quality was found to have a significant positive impact on the financial performance of firms as measured by Tobin’s Q, while firm size and leverage were found to have a significant impact on the financial performance of firms as measured by return on assets and return on equity.Practical implicationsThis paper will be greatly beneficial for financial practitioners and policymakers because it provides practical suggestions and recommendations about the types of external audit that are indispensable for the overall effectiveness and performance of firms. The study findings may also aid strategic policy formulation and execution for better corporate governance practices for the purpose of profit and wealth maximisation.Originality/valueTo the best of the authors’ knowledge, to date, no previous research has evaluated the effects of audit committee features and external audit quality on the financial performance of firms in India after the implementation of the new Companies Act, 2013. Hence, this study fills this void in the present literature by examining the overall features of the audit committee and external audit and their impact on firm performance in the setting of India.

AUDIT COMMITTEE CHARACTERISTICS AND SUSTAINABILITY PERFORMANCE IN NIGERIAN LISTED BANKS

This study investigates the influence of audit committee characteristics on the sustainability disclosure among the Nigerian listed banks. Using the Fixed Effect regression estimator of panel data for ten (10) listed banks in Nigeria over the period of 2014–2016, the result shows that the influence of audit committee independence and gender diversity of audit committee are significantly positive on the sustainability disclosure. However, the audit committee magnitude has a negative and significant influence on the sustainability disclosure. This paper is unique as we consider the importance of the gender diversity of the committee given its relative contribution to sustainability reporting quality. This study tends to provide insights on sustainability reporting and assist stakeholders in emphasizing on the importance of sustainability disclosure through the audit committee oversight.

The influence of audit committee characteristics on impression management in chairman statement: Evidence from Malaysia

After the emergence of financial scams like Enron, WorldCom and Toshiba, the researchers have emphasized the significance of the audit committee (AC) in curtailing the earnings management (EM). The...

Factors that Influence Fraudulent Financial Statements in Retail Companies - Indonesia

Fraudulent financial statements is an intentionally misstatement of the financial statements. There are several factors affected the evidence of fraudulent financial statements report. The objective of this research is to investigate the influence of audit committee characteristics, managerial ownership, leverage, and liquidity toward the fraudulent financial statements report in retail companies listed on the Indonesia Stock Exchange in the period of 2012-2016. Using regression, the result shows that audit committee characteristic and leverage do not have significant effect on the fraudulent financial statements report, while managerial ownership and liquidity have. Simultaneously, audit committee characteristics, managerial ownership, leverage and liquidity have significant influence to the fraudulent financial statement report.

Effect of audit committee characteristics on relationship between financial distress and income maximization actions

The study aimed at obtaining empirical evidence regarding the influence of audit committee characteristics on the relationship between financial distress and income maximitation actions. The population on the current study were companies listed on the Indonesia Stock Exchange from 2015 to 2018. The sampling technique used non-probability sampling with a purposive sampling method to get 20 companies as research samples. The data analysis technique used moderated regression analysis. The test results provide empirical evidence that high financial expertise can weaken the influence of financial distress on income maximitation actions. This study also finds empirical evidence that the frequency of meetings is not a moderating effect of financial distress on income maximitation. The third hypothesis testing shows that the independence of the audit committee is able to moderate the relationship between financial distress on income maximitation.

The Influence of Audit Committee Characteristics on Modified Audit Opinion in Jordan

The Jordanian Corporate Governance Code (JCGC) was first enacted in 2004 and revised in 2017. It offers standards for ethical and decent practices in the corporates. Law in Jordan in 2009 has enforced the formation of an audit committee for all listed companies. Literature has substantiated that the audit committee characteristic (ACCs) impact the quality of financial reporting. This work investigates the role of ACCs in lessening the prospect of corporates in obtaining modified audit opinion in the context of Jordan. Four ACC problems (expertise, independent, meeting, and size) have been studied and the modified audit opinion. The total sample of 117 listed companies on the Amman Stock Exchange (ASE) was studied. The relationship between the modified audit opinions (dependent variable), and ACCs (expertise, independent, meeting, and size; as independent variables) was analyzed using logistic regression. The ACCs is projected to effectively improve the quality of financial reporting, and thus, decrease the prospect of corporate in obtaining modified audit opinion. The findings according to the listed companies from 2012 to 2017 in Jordan showed that audit committee (AC) expertise validates this likelihood. Lastly, there is no effect of AC independent, size, and the number of meetings held on the modified audit opinion. General, the findings have policy implications on enhancing corporate governance (CG) efficacy concerning the quality of financial reporting.

Do audit committee structure increases influence the level of voluntary corporate governance disclosures?

PurposeThe purpose of this paper is to provide an insight into the voluntary corporate governance disclosure and AC practices among Malaysian property listed companies. Along with that, the influence of AC characteristics on voluntary corporate governance disclosure was also examined.Design/methodology/approachThe study used the content analysis of annual reports to extract voluntary corporate governance disclosures and audit committee (AC) practices. The relationship between voluntary corporate governance disclosures and AC characteristics was examined by using the panel data regression analysis.FindingsBased on the results of the study, it can be concluded that all three variables: AC size, AC independence and AC meetings are the factors that influence the level of voluntary corporate governance disclosure among sampled companies.Practical implicationsThis study provides an overview of voluntary corporate governance disclosures practices, which have shown an increasing trend of information disclosed by Malaysian listed property companies. Additionally, the AC structure was also found satisfactory with highly independent and higher number of meetings as required by Malaysian Code of Corporate Governance and Bursa Malaysia requirement.Social implicationsBy filling the gap identified in this study, investors’ confidence will boost as they will have sufficient information about the Malaysian listed property companies – resulting in strengthening competitiveness and growth by attracting local and foreign investments in the country. The influence of AC attributes over the quality of disclosure among Malaysian listed properties companies is identified, and regulators introduce more explicit rules for AC mechanism for improving the disclosure quality. The increase in the quality of information provided in the annual reports will lead toward highly efficient and transparent stock market.Originality/valueThis study has provided an insight into corporate governance of listed companies in Malaysia, which will contribute to the extended literature. Along with that, it will also provide an overview of corporate governance structure among Malaysian listed companies to the policy makers.