Role Of Audit Committee Research Articles

Internal Audit in Public Hospitals: the case of Greece

Internal control is of utmost importance for effective corporate governance, particularly in public hospitals aiming for modernization in the Greek framework. Internal audit functions enhance transparency, enforce accountability, and ensure compliance with societal values, bolstering public trust. This study delves into the implementation of internal control in Greek public hospitals, considering factors like size, structure, and operational intricacies. We explore the regulatory framework, procedures, scope, and objectives, while interviewing auditing experts for insights into challenges and opportunities. Findings reveal procedural dominance in current implementation of the Law. Focus on accounting neglects crucial functional departments. The audit committee's role and composition raise independence concerns. Understaffing further hampers operations. A significant weakness appears in the independence of the audit. Internal auditors report to the hospital administrator and participate in the audit committee. The appointment and remuneration of auditors is not based on the auditor's competence and suitability, but on a cost basis. The question therefore arises as to whether the auditor performs the duties objectively and impartially in accordance with the International Institute of Internal Auditors' standards. Furthermore, regarding the research question on the role of the internal auditor and the treatment by auditees, there has been a significant improvement as evident by the respondents’ answers.

The Effect of Profitability and Liquidity on Going Concern Audit Opinion Acceptance: The Role of Audit Committee

The purpose of this study was to determine the effect of profitability and liquidity ongoing concern audit opinion acceptance by using the audit committee variable as a moderator. The data in this study uses secondary data in the form of financial reports available on the Indonesia Stock Exchange (IDX) website. The population of this study are customer cyclical companies listed on the IDX for the period 2019 - 2021, with a total sample size of 64 cyclical customer companies. Based on the results of this study, profitability influences the acceptance of going concern audit opinion on companies. Meanwhile, liquidity does not influence going concern audit opinion acceptance. The audit committee is also unable to moderate the effect of profitability and liquidity ongoing concern audit opinion acceptance

The role of ownership structure, board, and audit committee in corporate social responsibility disclosure: Jordanian evidence

Purpose This paper aims to explore the extent of corporate social responsibility disclosure (hereafter CSRD) in Jordan and also examine whether ownership structure, board of directors and audit committee characteristics influence CSRD. Design/methodology/approach The extent of CSRD is measured by constructing a CSRD index for industrial firms listed on the Amman Stock Exchange from 2016 to 2021. Panel regression analysis is used to examine the potential effect of ownership structure, board of directors and audit committee on the level of CSRD. Findings This study provides empirical evidence that diverse groups of shareholders have different effects on CSR engagement, and board characteristics (board size, board independence and gender diversity) play a vital role in increasing voluntary disclosure, including CSR information. There is no evidence to support that CSRD is influenced by audit committee characteristics. Practical implications This study recommends that corporate regulators and policymakers can improve CSRD practices by expanding the scope of existing disclosure requirements related to CSR and developing a structured CSRD index to measure the degree of CSRD practices for comparative purposes. Encourage firms to actively participate in social responsibility programs by granting tax incentives and government facilities to firms with the best CSR reports. Policymakers should introduce initiatives that support female’s representation on board. Finally, firms should restructure their boards by increasing board size and the percentage of independent directors to enhance their effectiveness to support CSRD. Originality/value This paper contributes further insights into the literature on CSRD practices and disclosure by analyzing data from developing market contexts.

NATIONAL CONFERENCE – STRENGTHENING CORPORATE GOVERNANCE IN SERBIA: SUSTAINABILITY REPORTING AND THE INCREASING ROLE OF AUDIT COMMITTEES, BELGRADE, SERBIA

A National Conference “Strengthening Corporate Governance in Serbia: Sustainability Reporting and the Increasing Role of Audit Committees” was held in Belgrade, Serbia on May 11, 2023. The important role of the audit committee as a link in the chain of parties ensuring proper reporting and the related assurance provided by auditors was highlighted during the Conference.

The Role of Audit Committee and Risk Monitoring Committee on Firm’s Hedging Practice

This study aims to analyze the role of audit committee and risk monitoring committee (RMC) on firm risk management measured by hedging. Firms with both committees will have better governance in monitoring risk. The population of this study is companies listed in IDX. This study uses samples of 104 non-financial companies. Using panel data regression, we find that the composition of audit committee members who have financial and/or accounting background have a significantly positive effect on hedging, meaning that an audit committee with such a higher composition will encourage firms to hedge more to reduce risk exposure. Meanwhile meetings and size of audit committee are insignificant. The presence of RMC has a negatively significant effect on firm hedging, meaning that the firm is more capable in identifying risk to determine the most appropriate way to mitigate risk, where not all risk can be mitigated by hedging.
 Keywords: Audit Committee; Risk Monitoring Committee; Hedging

The bridge to quality financial reporting: Audit committees’ mediating role in IFRS implementation for emerging markets

AbstractThis study aims to examine the impact of International Financial Reporting Standards (IFRS) adoption on financial reporting quality in Saudi Arabia, with a specific focus on the mediating role of effective audit committees (ACs) and the specific characteristics of ACs that have a negative correlation with earnings management (EM) practices. The research collected financial data from 92 listed firms spanning the period from 2012 to 2020 encompassing both the years before and after the IFRS adoption in 2017. The study used regression and rigorous mediation analysis based on the Baron and Kenny (1986) approach to investigate the relationship between IFRS adoption, ACs, and EM. The findings indicate that IFRS adoption has a negative and significant impact on EM practices. Additionally, the study found that AC expertise is positively influenced by the IFRS adoption, while the AC size has a positive correlation with EM levels. The study further revealed that AC expertise has a negative correlation with EM levels and fully mediates the relationship between IFRS adoption and EM. The research's findings carry significant practical implications for a range of stakeholders. Regulators and policymakers in Saudi Arabia should consider the positive impact of IFRS adoption on financial reporting transparency and accountability when evaluating their regulatory framework. Firms can strengthen their corporate governance practices by focusing on the recruitment and training of AC members with robust financial and accounting backgrounds. This emphasis on AC quality, rather than size, is crucial to mitigating EM practices and enhancing the effectiveness of IFRS implementation. Lastly, investors and analysts can utilize these findings to assess the reliability of financial statements and identify firms with robust governance structures. Furthermore, the study contributes to the discourse on financial reporting and governance dynamics in emerging markets, offering insights for future research and policy discussions.

Firms Attributes and Reporting Lag: The Moderating Role of Audit Committee

This study investigated empirically the moderating role of audit committee on firm attributes and reporting lag of quoted money deposit banks in Nigeria for a period of ten years covering from 2012 to 2021. The study adopted ex-post facto research design and data sourced from selected firm’s yearly reports. To proxy firm attributes the study used return on asset (ROA), asset tangibility (ASSTAN), firm growth (FGRWT), firm age (FAGE), and firm size (FSIZE). Reporting lag was measured using the firm’s reporting lag within the period of review while audit committee was measured by the audit committee size. The study conducted some preliminary analysis such as descriptive statistics, correlation analysis to ascertain the normality and presence of multi-colinearity in the data collated and used the ordinary least square regressions analysis to analyze the data collected. Findings show that the moderating role of Audit committee on ASSTAN, FAGE, and FSIZE positively but insignificantly affect the level of reporting lag of quoted Money Deposit Bank in Nigeria while ROA and FGRWT, positively and significantly affect the level of reporting lag of quoted Money Deposit Bank in Nigeria hence audit committee moderating firm attributes can impact on the level of reporting lag of Money Deposit Bank. The study recommends that firms should have an efficient audit committee to boost a strong internal control and accounting system and also abide by all the regulations, including accounting standards, so as to reduce auditors’ reporting lag

Activate the Role of Audit Committees in reducing Environmental Risks from a Governance Perspective " a field study on some Oil Sector Companies"

Activate the Role of Audit Committees in reducing Environmental Risks from a Governance Perspective " a field study on some Oil Sector Companies"

Moderating Role of Audit Committee's Legal Expertise on Risk Management and Financial Reporting Quality

This study aims at examining the moderating role of audit committee’s legal expertise on risk management and financial reporting quality. An ex-post facto research design was adopted and data collected from secondary sources were analysed through a structural equation modelling approach with the aid of a partial least square technique. The results revealed that the quality of financial reporting is greatly impacted by risk management. Additional, the study revealed that the quality of financial reporting is influenced by the audit committee's legal expertise. Furthermore, the study revealed that the legal knowledge of the audit committee acts as a moderating factor, strengthening the connections between risk management and financial reporting quality. The study concludes that members of audit committees with legal expertise are more likely to exercise caution while engaging in business activities that could have legal repercussions. The likelihood that the banks may incur legal obligations is also associated with the quality of the financial reporting. The study therefore, recommends that in order to ensure investor confidence in the quality of financial reporting, regulators should keep an eye on the requirement for legal knowledge on audit committees. Professional organizations should see to it that legislation is written to safeguard investors' interests.

Audit Tenure and Financial Reporting Quality of Listed Non-Financial Services Firms in Nigeria: The Modeating Role of Audit Committee’s Independence.

Audit Tenure and Financial Reporting Quality of Listed Non-Financial Services Firms in Nigeria: The Modeating Role of Audit Committee’s Independence.

Does audit committee matter? Evidence from Tanzanian listed firms.

Aim: The primary role of audit committees is to provide oversight in the financial reporting, audit process, internal controls and in compliance with regulations and laws. The objective of this paper is to investigate the impact of board audit committees attributes on firm performance. Design/Research methods: Using a sample of firms publicly traded on the Dar es Salaam Stock Exchange (DSE) during 1998–2018; this paper estimated fixed effects regressions to tests the hypotheses developed. Conclusions/findings: The results show that audit committee attributes are positively linked with firm financial performance. Specifically, the findings reveal that audit committee attributes as measured by audit committee meetings, existence of audit committees, audit committee size and audit committee independence have positive impact on corporate performance as measured by return on sales (ROS) and profitability. These findings confirmed that firms having audit committees performed better than those without audit committees. Originality/value of the article: There is scarce research which examines the link between audit committees and firm performance in developing countries. To date, there is no study that has investigated the relationship between audit committee characteristics and firm performance in Tanzania. This paper provides new evidence on the relationship between audit committee attributes and firm performance in Tanzanian environment. Implications of the research: Overall, the findings recommend existence of large independent audit committees which conducts their meetings regularly as it is ideally enhances firm financial performance. Keywords: Audit committee attributes, corporate governance, firm performance, Tanzania JEL: G3, N27

Implications of directors’ education for audit fees: does the audit committee matter?

PurposeBuilding upon multiple theories (i.e. agency, signalling and human capital), this paper aims to explore the effects of directors’ education on audit fees and to assess the mediating role of audit committee (AC).Design/methodology/approachThe authors use an econometric analysis of Italian-listed non-financial firms during the period 2012–2015 using single-mediator models through ordinary least squares and logit regressions. Moreover, the authors apply the path analysis with the bootstrap method to test the mediating effect.FindingsFindings show that the directors’ level of education improves audit fees. Additionally, the presence of an AC and the financial expertise of its members mediate this relationship.Practical implicationsBy offering insights into the implications for audit pricing of the board and AC human capital, the paper helps regulators and policy-makers to understand which characteristic of such governance bodies improves auditing quality and the provision of better financial reporting.Originality/valueThe study uses a unique data set hand-collected from multiple sources and advances the auditing literature by shedding light on the reasons behind the influence of directors’ characteristics on audit fees and on the role played by the AC.

Does Corporate Governance Impact Risk Disclosure? An Empirical Analysis in the Indian Context

This study aims at identifying the determinants of corporate governance that impact corporate risk disclosure in India’s top non-financial listed companies based on market capitalisation. The analysis of the study is based on risk disclosure practices of the leading non-financial listed companies using annual reports as well as risk disclosure practices in the presence of various regulations. The risk exposure is measured using manual content analysis while the impact is analysed using multiple regression. The empirical findings reveal that the corporate risk disclosure level has improved significantly. The major corporate governance variables namely board size and ownership are insignificant to risk disclosure whereas audit committee meetings and role duality are somewhat significant. Firms having bigger size plays a major role in risk disclosure practices of companies, on the other hand, liquidity and growth of the firm do not influence risk disclosure practice. Due to the constant fallouts of companies, this paper tries to analyse the role of corporate governance practices in minimising companies’ risk exposure. The results of the study help analyse the failures in corporate governance practices that lead to companies’ poor disclosure policies.

Governing anti-corruption and perceived auditor independence

PurposeThe growing international legal agenda and the fast development of corporate governance rules are now prompting firms to put emphasis on anti-corruption procedures. On the other hand, wide-ranging concerns have been raised by regulators and policymakers regarding the effectiveness of audit committees in promoting ethical behavior and safeguarding auditor independence from the adverse consequences of purchasing non-audit services. The purpose of this paper is to examine the relationship between the adoption of anti-corruption measures and perceived auditor independence in the context of audit committees.Design/methodology/approachAfter conducting the Breusch–Pagan Lagrange Multiplier test and the Hausman test, the random-effect model is used as the most appropriate estimator. Several endogeneity tests are also used to account for the endogenous nature of the corporate governance variables in the models.FindingsUsing a sample of UK FTSE 350 firms, this paper provides evidence that anti-corruption efforts are associated with lower purchases of non-audit services and lower economic bonding between auditors and their clients. Furthermore, the findings of this paper reveal that the adoption of anti-corruption efforts substitutes the role of audit committees in enhancing perceived auditor independence and that audit committees do not play a significant incremental role.Originality/valueTo the best of the author’s knowledge, this is the first study of its kind to focus on bolstering perceived auditor independence while enhancing the control and ethical environment from the clients’ side instead of the auditors’ side.

Financial Performance of Banking Institutions: The Role of Management Ownership, Independent Commissioners, and Audit Committee

This research examines the impact of implementing effective corporate governance practices on the financial performance of banking firms publicly traded on the Indonesia Stock Exchange (IDX). The study focuses on banking businesses listed on the Indonesia Stock Exchange, including the population for analysis. A purposive sampling method was employed to select eight banking companies for the study. The utilized data source comprises secondary data consisting of annual report information about banking institutions. The employed data analysis methodology involves the application of the classical assumption test, which encompasses a normality test, a heteroscedasticity test, and a multicollinearity test. Additionally, all hypotheses are examined by partial, simultaneous, and determination coefficient tests. This study's findings suggest a favorable relationship between managerial ownership and independent commissioners; however, this relationship does not significantly impact financial performance. The audit committee has a notable and substantial impact on the financial performance of banking firms publicly traded on the Indonesia Stock Exchange (IDX).

PENGARUH SALES GROWTH, AUDIT COMMITTEE, KOMISARIS INDEPENDEN DAN LEVERAGE TERHADAP NILAI PERUSAHAAN

This research aims at how the effect of sales growth and leverage toward firm value, and the role of the audit committee and independent commissioner on firm value in trading and service companies listed on the Indonesia stock exchange during 2017-2019. The sample was selected by purposive sampling method and valid data were 29 companies from 154 companies. Data Processing techniques use the Eviews 11 (Econometric Views) for Windows and Microsoft Excel 2019 program. The results of this research indicate that sales growth and leverage have a positive and insignificant effect toward firm value, while the audit committee and independent commissioners have a negative and insignificant effect on firm value. The implication of this research is the need for for other factors to support else sales growth and leverage to influence firm value and the need for an increased the role of audit committee and independent commissioners to increase firm value which will provide a good signal for investors.

PENGARUH GOOD CORPORATE GOVERNANCE DAN INTELLECTUAL CAPITAL TERHADAP FINANCIAL PERFORMANCE PERUSAHAAN BUMN

The objective of this research is to obtain empirical evidence about the effect of good corporate governance which include audit committee, board size, independent commissioner and intellectual capital on financial performance in state-owned enterprises listed on the Indonesia Stock Exchange (IDX) during the year 2015-2019. This study uses secondary data. This research is conducted with a sample of 59 state owned enterprises data with the technique used in this study is purposive sampling. The research data was processed using Statistical Product and Service Solution software for Windows version 23 (SPSS version 23). The results of this research show that the intellectual capital and independent commissioner have a significant influence on financial performance, while audit committee and board size do not have a significant effect on financial performance. The implication of this study is the need to increase the role of audit committee, board of directors and independent commissioner to increase good corporate governance and manage intellectual capital that will increase the firm financial performance.

FAKTOR YANG MEMPENGARUHI INTELLECTUAL CAPITAL DISCLOSURE PADA PERUSAHAAN LQ45

The purpose of this research was to examine the influence audit committee’s characteristics and firm characteristics toward intellectual capital disclosure in LQ45 companies listed in the Indonesian Stock Exchange in 2017-2019. The sample was determined by using total sampling method by taking 45 LQ45 companies each year with a total of 135 samples. The data was processed with Eviews 11 by using multiple regression technique. The result showed that audit committee’s meeting frequency had positive effect on intellectual capital disclosure, while audit committee’s size, firm size, profitability, leverage, and industry type had no effect on intellectual capital disclosure. The implication of this study was the need to increase the role of audit committee to increase intellectual capital disclosure and reduce asymmetry information within management and stakeholders.

The Role of Internal and External Audit Committees in Reducing Banking Failure

Purpose: This study seeks to identify the role of internal and external audit committees and their impact on limiting bank failure. Research Design: The research included a quantitative analysis of data on commercial banks in the south of the country under study, which numbered (6) commercial banks. The study sample included a group of (77) employees working in these banks The analysis is based on a solid base that sought to reveal the practices of these banks in the role of internal and external audit committees and their impact on reducing bank failure. The study sought to test the effect and correlation relationship between the independent variable represented by the internal and external audit committees and the variable affiliated with the bank, failure and deportation. Data were processed by statistical methods using (SPSS) program. Results: The results of the statistical analysis of the data collected through the questionnaire tool prepared for this purpose showed that there is an effect and correlation between the independent variable of the internal and external audit committees and the variable dependent on bank failure and its dimensions (information asymmetry, credit risk, systemic risk, moral dimension).

Corporate Governance in the Public Sector of Ghana: The Role of Audit Committees in the Covered Entities.

Corporate governance sets the tone at the top by bringing efficiency and effectiveness in managing covered entities. It minimises risks and prevents fraud thereby protecting the public purse. However, applying the concept of corporate governance has met some challenges. The population of the study was Audit Committee members of covered entities and purposive method of sampling was used to select 50 Audit Committee members for the study. Likert type five scale response questionnaire was used to collect data and hypothesis was statistically tested using analysis of variance technique to address the research question. It was found out that the Audit Committees perform differently from one entity to another. Some do not follow the Audit Committee Guidelines.