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Audit committee effectiveness: An empirical investigation of the contribution of power
... Audit Committee Effectiveness (ACE) has been defined in many ways depending on its context. While Kalbers and Fogarty (1993), Larry and Nair (1992) and PwC (1999), in their respective definitions, emphasized the ability and competency of AC to fulfill its responsibility, and NACD (2000) emphasized the outcome (value addition to its board and the corporation) of the committee. DeZoort et al. (2002) defined the term AC effectiveness comprehensively, linking both the aspects through the process that AC undertakes. ...
... Alqatamin AC's financial expertise may be a key determinant of its effectiveness because of its role as the ultimate watchdog of the financial reporting process. Kalbers and Fogarty (1993) concluded that the members skilled in Accounting and Finance increase the AC's effectiveness. McDaniel et al. (2002) found that the financial experts on the AC would bring more importance to issues, which otherwise would have been given low priority. ...
The paper investigates the effect of eleven Audit Committee (AC) characteristics on Firm Performance (FP). It identifies characteristics that significantly influence FP and develops an index to provide a holistic approach to the relationship between AC effectiveness and FP. It applies cross-sectional time-series FGLS regression and checks robustness using panel-corrected standard error regression after identifying heteroscedasticity, autocorrelation, and cross-sectional dependence of 375 observations. The study finds a significant positive effect of AC expertise, attendance in AC meetings, and the absence of executive directors in AC on both Return on Assets (ROA) and market capitalization of the firms. Gender diversity is exclusively significant for ROA, while shareholding positively impacts firm's market capitalization. This study is the first to use some new individual AC characteristics like the absence of executive directors in AC and AC charter and representation of AC members in board meetings.
... Audit Committee Meeting Frequency: Studies explore that, audit committee meeting frequency is associated with its effectiveness (Kalbers & Fogarty, 1993) and performance (Abbott et al., 2003;Almoneef & Samontaray, 2019). On the contrary, Rebeiz and Salameh (2006) argued that the quality of meetings is also important and that increasing the number of meetings doesn't necessarily enhance a firm's performance. ...
... The audit committee meeting frequency is also positively correlated with insurers' performance, suggesting that increasing meeting frequency increases a firm's performance. That is consistent with Kalbers and Fogarty (1993), and Abbott et al. (2003), who pointed out an audit committee that meets frequently can improve the financial accounting processes and lead to better performance. So, we reject the sixth hypothesis H6. ...
Abstract
This paper investigates the association between key corporate governance characteristics and the performance of general insurance
businesses listed on the Saudi stock exchange (TADAWUL). The methodology for the study is based on a pooled data collection for 11
Saudi general insurance companies from 2011 to 20. The linear regression model and the logarithm regression model are suggested to assess
the relationship between performance and corporate governance characteristics. The dependent variable is firm performance measured
using ROA, ROE, and Tobin’s Q. The independent variables are corporate governance variables consisting of a complete set of board and
audit committee characteristics. Insurer-specific control variables are introduced. The empirical results reveal that the characteristics of
corporate governance influence the performance of insurance companies. In particular, the board size, board’s tenure, the proportion of
independent directors in the board, audit committee size, audit committee meeting frequency, and proportion of health insurance premiums
have a positive impact. However, audit committee independence, size of the company, and proportion of reinsurance premiums have a
negative impact on the performance of the Saudi general insurance companies. Finally, the empirical results indicated also that there is an
unclear relationship between the performance and board meeting frequency, compensations of the Board, and the average age of the Board.
... The influence of audit committee size on the extent of information disclose in financial statements is well debated amongst academicians. On one strand, some scholars contended that a larger audit committee has the capacity of improving the status and powers of the committee within the company and by extension the quality of audit (Kalbers & Fogarty, 1993). Similarly, the presence of large audit committee, Zaman et al (2011) noted, is likely to uncover, through knowledge exchange, potential problems that might affect the effectiveness of the monitoring function of the committee. ...
... This result negates a number of arguments supporting audit committee size as a significant corporate audit attribute that aids financial risk disclosure. For example, it is argued that a larger audit committee has the potential of enhancing the rank and powers of the committee within the company and by extension the quality of audit (Kalbers & Fogarty, 1993). Similarly, it argued that the presence of larger committee size could reduce the problem of information disproportionateness and improve more disclosure (Chen & Jaggi, 2000). ...
s Governance mechanisms are put in place to reduce or eliminate information asymmetry where firms face many risks. It is against this background that this study investigate the role of audit committee attributes in financial risks disclosure in listed banks in Nigeria. Applying the agency theory, data was collected from the annual reports of commercial banks listed in the Nigerian Stock Exchange and then analysed using multiple regression models. The study revealed that audit committee size was negatively related to risk disclosure, while audit committee independence and expertise were significantly positively related. In terms of audit size, it suggests that the maximum size of six members as given by the Nigerian corporate governance codes is not large enough and portrayed as being ineffective. While on the other hand, the level of audit committee independence of members of Nigerian listed banks is high with enough accounting expertise to act in the best interests of the investors. Thus, the study recommends that maximum audit committee size for members as given by the Nigerian corporate governance codes be reviewed. Finally, as this study focused only on financial risk, further research is recommended to include both the qualitative and quantitative risk disclosure of IFRS 7.
... Previous studies have examined the impact of audit committee size on earnings management (Yang and Krishnan, 2005;Zalata and Roberts, 2016). Studies show that the status and powers of a large audit committee are linked to its size (Kalbers and Fogarty, 1993). Also, Zalata and Roberts (2016) argued that CEOs are unlikely to influence audit committees with many members. ...
... In line with SOX (Section 407), firms are required to report whether any audit committee member has relevant financial expertise. The emphasis on financial expertise is related to its role in dealing with complex issues in financial reports (Kalbers and Fogarty, 1993), minimising the possibility of misstatements (Abbott et al., 2004) and evaluating auditors' judgment (DeZoort and Salterio, 2001). Consistent with the Cromme Code (2002), German firms are required to have sufficient expertise among their audit committee members to ensure the quality of financial reports (Cromme, 2002). ...
Purpose
This paper aims to examine the relationship between audit characteristics (ACs) and audit fees on classification shifting (CS) among German-listed non-financial firms.
Design/methodology/approach
Using a sample of 130 German-listed (Deutscher Aktienindex, Mid Cap dax and Small caps Index) firms from 2010 until 2019, this study investigated the impact of audit committee size, audit committee meetings, audit committee financial expertise and audit fees on CS.
Findings
This study found the evidence of CS, meaning that managers misclassify recurring expenses in the income statement into non-recurring expenses to inflate core earnings. This study also found that the audit fee ratio, audit committee financial expertise and frequency of audit meetings are negatively associated with CS among German-listed firms. However, the audit committee size does not influence CS.
Research limitations/implications
This study will help the board improve its internal auditing practices and provide essential information to investors to assess how ACs affect the quality of financial reporting.
Originality/value
This study focused on a bank-oriented economy, i.e. Germany, with lower investor protection and low transparency. This paper documents new evidence on how ACs and audit fees impact CS among German firms, as most of the previous studies on CS mainly focused on market-oriented economies such as the UK and the USA.
... The Blue-Ribbon Committee has emphasised that time is one of the most valuable resources, so AC directors should spend it carrying out their duties; doing so means that ACs are effective (Abbott et al., 2003). The effectiveness of ACs, according to Kalbers and Fogarty (1993), may be a function of diligence or the perseverance of their members to execute their charges. The frequency of AC meetings, according to Menon and Williams (1994), is a signal of their diligence. ...
The aim of this study is to conduct a comprehensive literature review on the impact of audit committees' independence, meeting frequency, and financial expertise on earnings management (both accrual and real). This review will act as a guide for upcoming empirical research. Many countries, when drafting corporate governance legislation, have focused on improving the characteristics of audit committees to deter unethical behaviour by management. Jordan is among the countries that have included provisions in the Corporate Governance Code for listed service and industrial sector companies that emphasise the characteristics of audit committees and their directors. The provisions were implemented in 2009 and revised in 2017. The current study suggests that researchers should choose a study sample from the years 2014 to 2019 to achieve different goals. First, leaving out years after corporate governance started in 2009 lets us check claims that the quality of corporate governance mechanisms improves over time. This is because the years proposed to be left out (2009–2013) are long enough for listed companies to get used to corporate governance. Second, a comparison can be conducted on the quality of corporate governance mechanisms before and after recent reforms. Empirical studies are likely to provide feedback to both legislators and regulators as to whether governance mechanisms are working as intended.
... A larger audit committee may strengthen its discussion in the audit committee. In addition, Kalbers and Fogarty (1993) reported that a large audit committee will improve the audit committee's power within the organization and enhance their participation in the decisionmaking process. Moreover, García-Meca et al. (2021) record that larger audit committees are considered as a governance instruments able to monitor managerial decisions and limit the effect of tax aggressiveness promoted by a firm's management Panel B of Tables 5 and 6 also shows that the firms with an audit committee that holds more meetings during the year and the firms with audit committee members who have more accounting expertise engage less in tax-avoidance activities. ...
This study examines the impact of family ownership on tax avoidance decisions. This study further investigates the effects of corporate governance quality on the relationship between family ownership and tax avoidance. We construct a sample of non-financial firms listed on the ASE for the period 2015-2021. The results demonstrate that family-owned firms have high levels of tax avoidance. This result supports the private-benefit expropriation hypothesis. Regarding the mediating effect of corporate governance variables, the results suggest that large audit committees and audit committees that meet more frequently curb attempts by family owners to avoid paying tax.
... The literature on AC effectiveness is extensive, and the results have been mixed. However, several factors that influence AC effectiveness have been identified, including stock ownership, power, financial expertise and industry expertise (DeZoort, 1998;Kalbers and Fogarty, 1993;DeZoort et al., 2002;Abbott et al., 2004;Carcello et al., 2002;Beasley, 1996). The present research focuses on ACCs such as financial expertise, independence, tenure and female membership. ...
Purpose
The literature on the influence of audit committees (AC) and cosmetic accounting (CA) is scarce. AC plays a unique and vital role in boosting earnings reliability in countries with weaker application of accounting standards or weaker legal protection for investors. AC, therefore, are considered to be one of the essential tools available to directors in supervising management decisions regarding financial reporting. This paper aims to examine the influence of AC characteristics (ACC) on CA and how this relationship is moderated by the audit fee.
Design/methodology/approach
This study used probit regression to analyze 1,218 firm-year observations of listed companies in Tehran Stock Exchange from 2014 to 2020.
Findings
The results show that AC financial accounting expertise, AC independence, female AC membership and AC tenure were negatively related to CA. The negative relationship is highly pronounced when a firm incurs higher audit fees, and audit fees moderate the relationship between ACC and CA. Results for the robustness checks show that only AC independence was significant, and the results of other characteristics were not significant.
Research limitations/implications
This research was conducted in an Iranian setting where the formation of ACs is on the verge of regulation; therefore, the data used for the study only contains the seven-year period of ACs’ statutory activity. In addition, a lack of consensus on the precise measures of an AC’s effectiveness could be considered as a restrictive factor.
Originality/value
The findings provide an initial insight into the effect AC on CA and moderating effect of audit fee on the relationship between ACC and CA.
... 5). AC efficiency, a potential insistence, is when the AC members do their jobs or a task of diligence (Kalbers & Fogarty, 1993). The ACC members to attend committee meetings could be employed as a calculation of AC diligence. ...
This job aims to confirm the role of audit committee (AC) attributes in curbing earnings management (EM) (discretionary accruals, DA). More significantly, it seeks to fully explore the moderating impact of audit quality (AQ) (Big4 companies) on the association of AC attributes with DA. The research subject is data from insurance businesses listed on the Saudi Stock Exchange (Tadawul) over an eight-year period (2014–2021). The data analyses from this period show that AC size, commitment, meetings, and independence negatively and significantly influence DA. However, AC experience was not linked to DA. The impact of moderating variables was also explored. AQ has a significant and negative moderating influence on the association of audit committee size (ACZ) with DA. Furthermore, the regression outcomes confirm that AQ does not affect the association of DA with other AC attributes. These findings can help investors and shareholders evaluate the trustworthiness and quality of annual reporting when deciding whether to invest in companies listed on Tadawul. They can also help Saudi policymakers develop and strengthen laws and regulations to assist and encourage firms’ production of reliable, quality financial statements.
... One stream of the agency literature suggests that the monitoring role of AFEs is essential to effectively promote financial reporting quality. Kalbers and Fogarty (1993) and Lipman (2004) argue that financial reporting issues involve a high level of technical detail that demands audit committee members be equipped with knowledge of accounting concepts and the auditing process to be able to identify problems and raise questions of management, as well as access to an auditor to protect shareholders' interests and reduce agency costs. Defond et al. (2005) uses "best practices" to argue that accounting expertise may be more important for audit committee members than any other expertise, as they are responsible for tasks that require a high degree of accounting sophistication. ...
To restore investor confidence and promote the integrity of financial accounting information provided to investors , following the passage of the Sarbanes-Oxley Act (SOX), the SEC adopted two new rules for public firms in early 2003, requiring the disclosure of audit committee financial expertise (ACFE) per SOX 407 and the reconciliation of non-GAAP financial measures to those most comparable in GAAP (Regulation G) per SOX 401 (b). Using quarterly filing data in the post-SOX era from March 2003 to December 2016, this study examines the impact of these requirements, with a focus on the effect of ACFE on the main earnings manipulation tactics used to just meet or beat analyst expectations (JUSTMBE). Our study investigates the effects of overall ACFE and its components on three key earnings management tactics, namely, discretionary accruals, real activities management , and non-GAAP financial disclosures. We observe that firms with a higher level of ACFE, particularly accounting and finance expertise, exhibit a lower propensity to JUSTMBE. Furthermore, we posit that two upward earnings manipulations, accrual-based and real activities management, are significantly mitigated by ACFE through a complementary effect of its accounting and supervisory expertise components. However, we identify a clear strategic shift in which non-GAAP financial disclosures with unexpected exclusions become a popular alternative tactic for managers to JUSTMBE under the increasing presence of ACFE. This study provides empirical evidence with implications for regulators to consider more rigorous intervention and regulation on non-GAAP disclosures and to refine the requirement of audit committee financial experts with an emphasis on the complement of accounting and non-accounting financial expertise to effectively curtail earnings manipulation.
... Audit Committee Effectiveness (ACE) has been defined in many ways and contexts. While Kalbers and Fogarty (1993); PwC (1999); and Rittenberg and Nair (1992), in their respective definitions, emphasized on ability and competency of AC to fulfill its responsibility, NACD (2000) emphasizes the outcome (value addition to its board and the corporation) of the committee. DeZoort et al. (2002) link both aspects through the process AC undertakes in their attempt to comprehensively define the term AC effectiveness. ...
... ACE has been defined in many ways in different contexts. While the 1990s definitions (Kalbers and Fogarty, 1993;Rittenberg and Nair, 1992;PwC, 1999) emphasized the ability of AC to fulfill its responsibility, definitions in the early 2000s highlighted the outcome through value addition (NACD, 2000) and on the determinants of AC (DeZoort et al., 2002). Through a synthesis of these definitions, we comprehensively define ACE as "An effective AC, through its composition, has enough members to discharge its duties on time, and has diligent members with expertise, experience, authority, and resources to ensure reliable reporting, internal controls, audit process, and monitoring the management while remaining independent of their influence, to safeguard its stakeholders' interests." ...
Purpose
This study aims to examine the relationship between audit committee (AC) effectiveness and firm performance (FP) with the moderation of knowledge intensity while observing the varying effect of each AC characteristic’s influence on its effectiveness.
Design/methodology/approach
This study examines 133 companies covering five years from 2016 to 2020 using the partial least squares-structural equation model and weighing AC effectiveness-related characteristics through multiple regression between AC characteristics and the AC effectiveness construct.
Findings
The results indicate that the knowledge intensity of the firms negatively influences the relationship between their AC effectiveness and FP, implying that the ACs are not sophisticated enough to monitor the knowledge component of the firm’s assets. Among AC characteristics, six attributes have a significant positive impact, two have a negative impact and three have no significant influence on AC effectiveness while influencing FP.
Research limitations/implications
Apart from guiding the regulators, managers and other stakeholders to choose an appropriate mix of AC characteristics for enhancing FP, the study contributes to the existing literature by providing evidence that ACs are ineffective in monitoring the knowledge assets of the company compared to physical assets.
Originality/value
This study is pioneering in investigating the moderation role of knowledge intensity on the relationship between AC effectiveness and FP. While providing a comprehensive and holistic view of AC effectiveness by considering 11 AC characteristics’ individual as well as aggregate effects on FP, it removes the obsolescence of earlier research in the Indian context owing to the latest regulatory reforms.
... In order to ensure that executive directors make decisions with the interests of the principals (shareholders) in mind, outside directors are regarded to be necessary (Kantudu & Samaila, 2015). Additionally, a strong audit committee that respects ethical accounting procedures and is unbiased helps ensure an organization's efficacy, which in turn encourages profitability (Kalbers & Fogarty, 1993). ...
This study examines audit committee characteristics and financial performance of manufacturing companies in Cameroon. The study adopted ex-post facto research design. The population consisted of the 133 manufacturing companies in Cameroon. A sample of 20 companies was used and data collected from secondary sources within the period 2013 to 2022. The data were analysed with the aid of a panel regression analysis. The results showed that audit committee size, expertise, and independence all positively affect financial performance proxy by return on assets, net profit margin and Tobins Q. the study recommends that manufacturing companies should make an effort to add an audit committee that is more educationally diverse and inclusive. This opens up the possibility of doing more risk assessments because audit committee members who are also knowledgeable in accounting have established precedents for better risk assessment and asset management for improved operational performance. Manufacturing firms should strictly abide by the corporate governance guidelines promoted regarding the number of audit committee members, as it has been demonstrated that the more members, the more effective resources in terms of independence and expertise to facilitate an effective audit function disposition for efficient business decisions that will favorably affect financial performance. In maintaining the required number of audit members, manufacturing businesses should always include an equal number of shareholders and managements representatives. This will lead to the formation of an unbiased audit committee that is fair and free from outside interference.
... Audit committee effectiveness depends largely on her ability to supervise the origination's financial results with individual members that are strong and strong audit committee characteristics (Kalbers & Fogarty, 1993). Again, an audit committee that is effective is expected to focus on shareholders' wealth optimization and also prevent personal interests' maximization by top management. ...
Efficient and effective board and audit committee in a company plays the role of ensuring the company performs very well in order to maximise the wealth of shareholders. This study therefore attempts to unearth the relationship between board composition, audit committee, and financial performance. ROA and EPS were used to proxy financial performance. The study used already existing (secondary) data from 2010 to 2019, hence the choice of the ex post facto design. Eight banks were selected and analysis was made on the data collected using correlation (Pearson). The study found insignificant relationship of 0.070 and 0.069 between board composition and ROA as well as EPS. While the correlation was negative and very weak between board composition and ROA, it was positive though still very weak with EPS. Also, the result unveils an insignificant relationship of 0.288 and 0.641 between audit committee and ROA as well as EPS with very week positive correlation with both. Recommendations made were that composition of the board should comprise of few members in order to increase effectiveness, efficiency and full participation that is sufficient to actualize the aim of wealth creation; board should wake up to their responsibility and strive to increase earnings by pursuing objectives and taking decisions targeted at enhancing the earnings; audit committee should be embraced, strengthened, meet frequently to check compliance and also ensure they improve their monitoring capacity; and audit committee independence level should be increased, believing that this will ensure better objectivity, transparency and monitoring for better financial performance. The study came to a conclusion and agreed to the various scholars that found a mixed relationship and correlation between board composition, audit committee and financial performance.
... The authority of the audit committee is also linked to its effectiveness, and most importantly, the audit committees actually perform their responsibilities and not remain just written powers in their charter (Kalbers & Fogarty, 1993). The definition of the authority of the audit committee in this study has been adapted from the framework of DeZoort et al. (2002) to be consistent with Jordanian legislation, that the authority refers to the powers they derive from the board of directors, corporate law, instructions of corporate governance, directives of the securities commission, and stock exchange listing requirements. ...
Effective audit committees are the best guarantee of sound corporate governance (Levitt, 1999). Thus, the investigation of factors affecting audit committee effectiveness (ACE) is the main objective of this study. Specifically, it evaluates the impact of audit committee independence, financial literacy, authority, and diligence on ACE. A mixed method approach is adopted consisting of a fully crossed, within-subjects design to test the main and interactive weights of the four variables and eight in-depth interviews. The analysis of 55 survey‐based factorial experiments reveals that financial literacy has the greatest effect on the external auditor’s decision to assess the effectiveness of audit committees followed by diligence, independence, and authority. Additionally, three significant interactions were found indicating that external auditors process decision-making information configurally, which means that external auditors consider the combined effects of the posited factors. The interviews provide constructive explanations of the effects of the four factors along with their interactive effects. The insights gained from this study are useful to the board of directors, professional bodies, and regulators charged with developing corporate governance seeking the optimal composition of audit committees. These results are vital because they reflect the viewpoint of the external auditors, who are the most communicative and interactive with the audit committees
... A risk management committee that meets more frequently is associated with a lower audit fee. Kalbers and Fogarty (1993) suggested that the size of a board level committee is likely to signal its status and power within an organization and influence the demand of audit quality. Ghafran and O'Sullivan (2017) found that small audit committees are associated with higher audit fees, and auditors may view smaller audit committees as requiring more effort. ...
This study investigates the impact of risk governance mechanisms on audit pricing in a relationship-based context. Specifically, this study considers how the formation of a Risk Management Committee (RMC) and its characteristics affect audit pricing and what its moderating effects are on the relationship between political connection and audit pricing. This study uses 2,460 firm-year observations from 2012 to 2017, comprising data from non-financial firms listed on the Main Market of Bursa Malaysia, Malaysia’s stock market. A panel regression analysis was adopted in the main analysis, which generated mixed support for the hypotheses. Results showed that auditors charged higher audit fees to politically connected firms. Similarly, politically connected firms that have an RMC tend to pay more audit fees. RMC meeting frequency, size and expertise are associated with lower audit fees. Politically connected firms with an RMC with independent members and more diverse experts tend to pay lower audit fees. The findings from this study can provide guidance to policy makers and practitioners on the composition of the RMC when formulating future risk management legislation.
... Audit committeeshould be staffed by non-executive directors, becauseof their independent view on important decisions [10].Outside directors are believed to ensure decisionsmade by the executive directors are in the best interestof the principals [20]. And a goodaudit committee that is independent and practicing good accounting canensure effectiveness in an organization which then leads to profitability [21]. Audit committee independence is cornerstone foran effective audit committee and crucial element in corporate reportingprocess and key prerequisite which adds value toaudited financial statements and the performance of a firm [22,23,24]. ...
This study examines the audit attributes and performance of financial institutions in Nigeria. The study adopted the cross-section research design. Data were analysed using the ordinary least square technique. Findings from the study revealed that audit committee independence and size have no significant effect on return on assets. On the other hand, audit committee expertise has a significant effect on return on assets. Further findings revealed that audit committee independence, expertise and size have no significant effect on Tobin Q, return on equity, earnings per share and net profit margin. The study concludes that there is a corporate governance code that propagates the composition of audit attributes in Nigeria. Thus, financial institutions in Nigeria should strictly adhere to the corporate governance code propagated by the security and exchange commission in regards to the number of audit committee members. In line with the new corporate governance code which is to be effective 2021, six and above members should constitute the audit committee, as it's proven that the more members, the more effective resources in terms of independence and expertise to facilitate an effective audit function disposition for an efficient business decision that will positively affect the firms' performance. Also, financial institutions in maintaining the required number of audit members should always put an equal number of representatives from both the management and shareholders. This will create an independent equal audit committee that will take decisions devoid of coercion or bias that negatively affects their performances.
... Similarly to board diligence, the number of meetings is a good proxy for audit committee diligence. It means that, in order to ensure diligence and performance of audit committees, their members are required to focus on their function (Kalbers & Fogarty, 1993). ...
In the process of restructuring the Vietnamese banking system, corporate governance in banks has become a topic of concern for a wide range of authorities, bank executives and researchers. This paper examines the effect of corporate governance on banks' performance in Vietnamese commercial banks through representing factors including size, independence level and diligence of board and auditing board, institutional and foreign ownership. Panel data collected from 26 commercial banks during the period from 2008 to 2014 is used. The paper uses a combination of pooled least squares regression and specific techniques of panel data which are fixed effects and uncertain effects. In addition, a generic generalized-method-of-moments approach is also considered. Applying a panel regression technique, the paper finds that size and institutional ownership have positive relation with banks' performance, while independence level has a negative impact. Moreover, performance in Vietnamese commercial banks has no clear correlation with independence level or foreign ownership.
... It is responsible for the review of the integrity of financial reporting and oversees the independence and objectivity of the external auditors. Audit committee visavis earnings management has been explored literature using various constructs of audit committee effectiveness such as size of the board [13], composition and independence [14], audit committee meetings [15] financial expertise of commit tee member [16], and financial motivation of independent directors [12]. ...
This study focuses on the effect of audit committee characteristics on earnings management among Listed Firms in Nigeria with aim to ascertain whether audit committee characteristics has effect on earnings management. Audit committee in an organization is to support firm’s governance and oversight functions with the regard to financial reporting, risk management system internal control structure, ethical accountability and internal and external audit functions. Earnings management is an attempt by managers to alter financial information either for their private gain or for the gain of stockholders. The study population was 190 firms listed in the Nigerian Stock Market. The study sample was 150 firms because 40 firms could not provide the needed data for the study as at 2014 to 2019. The study data was generated from the Thomson Reuters Data stream and other variables were handpicked from the firm’s annual reports covering the period of 2014–2019. A Generalized Least Square (GLS) estimator was used in estimating the parameters. The study provides positive and significant relationship between Audit Committee Independence (ACIND), Audit Committee Meetings (ACMT) and Earnings Management of listed Nigerian Firms in Nigeria. However, negative relationship between Audit Committee Size, Audit Committee Financial Expertise, Firm Size and Earnings Management was reported among the Listed Firms in Nigeria. Policy maker should provide policy on the composition of Audit for the committee members to clearly spelt out to enable members perform their functions effectively. Further study should look at diversity of audit committee, ethnicity, and religious influence because of the Nigerian diversity on ethnicity and religion.
... Therefore, the audit committee with members who are financially and accounting literate is expected to adopt high accountability standards and high levels of achievement as well as strive for superior company image and performance. It is clear that audit committees perform poorly when they are less financially literate (Kalbers & Fogarty 1993). Based on the description above can be arranged the following hypothesis: ...
... On the other hand, Pearce and Zahra (1992) argue resource dependence theory supports the notion of size (Karim et al., 2020a) because the larger the committee, the more likely it has more resources to be utilized in addressing issues and problems in the monitoring process (Zheng and Tsai, 2019;Elamer and Benyazid, 2018;Aebi et al., 2012). Similar to that, a larger committee could possibly boost the status and power of the committee in the company (Musallam, 2018;Coetzee, 2016;Kalbers and Fogarty, 1993). Therefore, it is reported that a larger risk management committee is able to address risk matters more effectively (Abubakar et al., 2018;Ng et al., 2012). ...
Purpose
While there is an increased demand from various corporate stakeholders on the need for public companies to have risk management frameworks as well as a stand-alone risk management committee to mitigate risks and simultaneously improve performance, this study investigates the effects of the risk management committee attributes on firm performance, and the role of board size is highlighted on this relationship in Malaysian listed companies.
Design/methodology/approach
Both accounting- and market-based performance measures have been used for measuring performance. A dynamic model using the generalized method of moments (GMM) has been employed to control for potential endogeneity, simultaneity and unobserved heterogeneity.
Findings
The findings reveal that risk management committee attributes such as size, independence and meetings negatively affect book-based performance measures and positively affect market-based performance measures. Moreover, board size positively moderates the risk management committee attributes and performance relationship. The study embraces the predictions of agency theory and resource dependence theory.
Practical implications
The findings are practically significant for Bursa Malaysia, Securities Commission Malaysia to assess the compliance of the Corporate Governance Code (MCCG, 2017) and for academia to further explore significant relationships in other emerging economies.
Originality/value
The paper contributes to multiple aspects: first, it studies the impact of risk management committee attributes on firm performance; second, it investigates the moderating effect of board size on RMC–performance relationship; in the end, the study employs dynamic modeling for estimation process to avoid dynamic endogeneity considered a main econometric problem for CG–performance relationships.
... Previous studies reported that the effectiveness of audit committees is to some extent dependent on the characteristics of the committee, such as its size (Dellaportas et al. 2012;Herdjiono and Sari 2017). To be effective in controlling and monitoring managers' behaviour, the audit committee must have enough members to carry out its responsibilities (Vicknair et al. 1993), with sufficient resources (Kalbers and Fogarty 1993). For example, Pucheta-Martínez and De Fuentes (2007) found that audit committee size affected the probability of companies receiving audit reports containing errors or non-compliant qualifications. ...
This paper seeks to investigate the effect of audit committee characteristics on the company’s performance. The sample consists of 198 non-financial companies listed on the Amman Stock Exchange (ASE) over the period 2010-2020. The results of the study show that the audit committee size, independence and gender diversity have a significant positive relationship with firm’s performance TQ whereas experience and frequency of meetings has an insignificant association. The results of the study could be beneficial for managers and boards in making suitable choices about audit committee characteristics and corporate governance mechanisms to enhance the company’s performance. The study gives policy makers a better understanding of the different characteristics required of an audit committee, for incorporation in future policy preparation to protect the shareholders’ interests. The relationship between audit committee characteristics and company performance is still ambiguous. This study contributes to the literature by identifying the role of audit committee characteristics in company performance, providing evidence for the view that performance is driven by specific audit committee characteristics.
... On the other hand, (Kalbers & Fogarty, 1993;Rittenberg & Nair, 1993) it stipulated that the effective audit committee would fulfill its responsibilities. Based on the, (Bhasin, 2012; Olaoye, Olaoye & Adebayo, 2019; Nelson & Shukeri, 2011; Spira, 2007) the audit committee is considered one of the main and important committees that oversees the financial statements and reports of the company. ...
This study examines the effects of the correlation between corporate governance mechanisms (audit committees) on the financial performance in the Jordanian companies, the sample comprises of 115 companies, 690 observations, listed in ASE for the period from (2010-2015), thus our goal is the correlation between the audit committees and financial performance to financial data analysis quality test and effect on the earnings. The results of this research expose a strong relationship both the audit committees and performance, and the results of this study have significant inclusion that supports encouraging the enforcement of the principles of governance and controlling the behavior of these committees, the reliability of statements, financial information, and reports issued by companies can be enhanced. The current study bridges the previous literature gap by providing empirical evidence on the quality and efficiency of audit committees in Jordan as an emerging economy and its impact on financial performance.
... Based on a research by Kalbers and Fogarty (1993), there is a relationship between the amount of the audit committees' power and their effectiveness [35]. From their perspective, the effectiveness can be ensured by three factors, namely financial reporting, independent auditing and internal controlling methods. ...
The overconfident general managers use their position and influence in their companies to reach their personal ambitions that can be followed by invasive tax policies, lower tax payments and showcasing of the higher incomes in relation to the general manager’s reward. In between, the audit committees have been designed so as to act independently and resolve the conflicts between the internal and external managers regarding the financial information and the selection of the accounting methods. Thus, the present study aims at investigating the effect of the audit committee on the relationship between the mangers’ overconfidence and tax avoidance in the companies accepted to Tehran’s securities exchange market for the years between 2015 and 2020. The present study is an applied research in terms of the study objectives and it is a correlation-descriptive research in terms of the method. In order to investigate the study subject, multivariate linear regression was used for data analyses. Then, Eviews Software package was utilized to perform the statistical analyses of the obtained information. The results indicated that managers’ overconfidence is significantly correlated with tax avoidance and that the relationship is direct meaning that the increase in the managers’ overconfidence causes an increase in the company’s tax avoidance, as well. Moreover, it was found out in the other study’s findings that the audit committee (financial expertise of the audit committee) exerts a significant effect on the relationship between the managers’ overconfidence and company’s tax avoidance and that the effect is reverse.
... The large size of the audit committee makes it more effective because of increased resources that are used to address issues the firm faces (Rahmat et al., 2009), and it also helps the firm claim more resources (Pincus et al., 1989). Moreover, largeraudit committees tend to have more power (Kalbers & Fogarty, 1993); they are linked to lower capital cost (Anderson et al. 2004) and are connected with the quality of financial reporting (Felo et al., 2003). ...
There has been a rise in the number of scholars, regulators, academics, practitioners, policy-makers, and shareholders who see empowering the audit committee as a key strategy for enhancing the reliability of financial reporting and advancing the quality of audits. The purpose of this study is to investigate the connection between audit committee traits and audit fees paid to auditors in Nigeria from 2012 to 2021. We demonstrate, using data from 105 companies listed on the Nigerian Exchange Group trading floor, that audit committee characteristics (size, meetings, and the presence of at least one member with previous experience in a similar position) are positively correlated with audit fees. Furthermore, we discover that the size of audit committees is positively correlated with audit fees, suggesting that the potential of assigning new roles to audit committees has not been fully realized, as scholars have pointed out. Last but not least, we provide evidence that audit committees with a high percentage of members with prior experience in audit committees may be less willing to allow a disproportionate provision of non-audit services in relation to total fees. Researchers interested in corporate governance, auditors, boards, and policymakers in Nigeria can benefit from our study.
... It also allows the committee to tackle many financial reporting concerns at the same time, resulting in the fulfilment of the external audit on schedule. According to Kalbers and Fogarty (1993), the complete membership of the audit committee is important to its efficacy. Financial reporting might be seen differently by different individuals. ...
This study investigated the impact of audit committee effectiveness on financial reporting timeliness in the Nigerian insurance industry. The study employed secondary data for the years 2012 - 2020. Hypotheses were tested using the Ordinary Least Square (OLS) method. The results revealed a significant relationship between timely financial reporting and audit committee size, expertise, and diligence. There was a negative but insignificant association between audit committee independence and financial reporting. The study concluded and recommended that audit committee effectiveness affects financial reporting timeliness in the insurance industry and that firms should increase the size and meeting frequency of the committee.
... Menon and Williams (1994) records that audit committee that do not hold the statutory minimum number of meetings of are likely to be less deligent in the discharge of their responsibilities. Kalbers and Fogarty (1993) complement this view by suggesting that audit committee effectiveness is a function of the desire of the committee to carry out its responsibilities. Li, Pike and Haniffa (2008) documents that frequency of audit committee meetings has a positive influence on audit lag. ...
The study x-rays the impact of gender of audit committee and frequency of meetings of audit committee on timeliness of financial reporting in Nigeria. The study used balanced panel data gathered from sixty two quoted companies for the period 2009-2014. The study conducted descriptive statistics and correlation matrix and the analysis was done using panel data. The study reveals that gender and frequency of meetings of audit committee have insignificant negative impacts on timeliness of financial reporting. This implies that more female members in the audit committee and more meetings held among audit committee members will likely reduce the delay associated with financial reporting. The study recommends that to reduce the delay associated with financial reporting; gender and frequency of meetings of audit committee should be strengthened in companies by incorporating more female members into the committee and advocating the need for frequent meetings and ensuring that members are encouraged to attend such meetings.
... Audit committeeshould be staffed by non-executive directors, becauseof their independent view on important decisions [10].Outside directors are believed to ensure decisionsmade by the executive directors are in the best interestof the principals [20]. And a goodaudit committee that is independent and practicing good accounting canensure effectiveness in an organization which then leads to profitability [21]. Audit committee independence is cornerstone foran effective audit committee and crucial element in corporate reportingprocess and key prerequisite which adds value toaudited financial statements and the performance of a firm [22,23,24]. ...
This study examines the audit attributes and performance of financial institutions in Nigeria. The study adopted the cross-section research design. Data were analysed using the ordinary least square technique. Findings from the study revealed that audit committee independence and size have no significant effect on return on assets. On the other hand, audit committee expertise has a significant effect on return on assets. Further findings revealed that audit committee independence, expertise and size have no significant effect on Tobin Q, return on equity, earnings per share and net profit margin. The study concludes that there is a corporate governance code that propagates the composition of audit attributes in Nigeria. Thus, financial institutions in Nigeria should strictly adhere to the corporate governance code propagated by the security and exchange commission in regards to the number of audit committee members. In line with the new corporate governance code which is to be effective 2021, six and above members should constitute the audit committee, as it's proven that the more members, the more effective resources in terms of independence and expertise to facilitate an effective audit function disposition for an efficient business decision that will positively affect the firms' performance. Also, financial institutions in maintaining the required number of audit members should always put an equal number of representatives from both the management and shareholders. This will create an independent equal audit committee that will take decisions devoid of coercion or bias that negatively affects their performances.
... We thank an anonymous reviewer for this suggestion. 14. Prior research suggests that larger ACs are legitimized by the board of directors and are more likely to be acknowledged as an authoritative body (Abbott et al. 2004;Kalbers and Fogarty 1993). However, Karamanou and Vafeas (2005) argue that size may limit the ability to monitor due to diffusion of responsibility. ...
Although firms are encouraged by the SEC and Department of Justice to conduct internal investigations following financial misconduct, prior research finds few benefits for investigating firms. This study examines a novel aspect of internal investigations—namely, whether the investigation is conducted by independent versus nonindependent teams—and explores the impact of these teams on investigation outcomes. Consistent with our predictions, we find that firms whose internal investigations are led by independent teams are more likely to retain external advisors, have a higher likelihood of CEO turnover, and face a lower likelihood of an SEC enforcement action than do firms whose investigations are led by nonindependent teams. Our findings demonstrate that the SEC grants enforcement leniency to firms that conduct an internal investigation, but this finding only holds when the investigation leader is considered independent. These results also suggest that appointing independent groups to lead internal investigations protects the firm, at the expense of the CEO, following accounting fraud. Our paper has important implications for researchers studying accounting irregularities as we are the first to show that independent board members and external advisors play a direct role in the resolution of financial misconduct through their job on the internal investigation team. This article is protected by copyright. All rights reserved.
... Hal tersebut dilakukan agar kualitas dari penyajian laporan keuangan perusahaan meningkat. Sehingga, komite audit harus berkompeten dibidangnya agar bisa mengawasi kompleksnya pelaporan keuangan dan tuntutan kualitas pelaporan keuangan semakin menjadi kebutuhan (Kalbers & Fogarty, 1993 (1976) menyampaikan terkait praktik manajemen laba oportunistik dapat diminimalisir oleh kehadiran seorang komisaris independen. Sebab, mereka tidak memiliki hubungan dan kepentingan dengan manajemen ataupun pihak dalam perusahaan karena mereka berasal dari luar perusahaan." ...
Purpose: This study was conducted to find confidence about the factors that affect earnings management in SOEs in 2018-2019 through accounting conservatism, audit committee expertise, independence commissioners. Research methodology: The methods in this research were quantitative with sample of 60 SOEs, sourced secondary data from annual reports and uses the EViews-9 application. Results: The conclusions are Random Effect selected as the model: (1) Earnings management significantly influenced by accounting conservatism in a positive direction, (2) Earnings management not significantly influenced by audit committee expertise, (3) Earnings management not significantly influenced by the independence commissioners. Limitation: In this study only the three variables and the period 2018-2019. Contribution: If the company applies accounting conservatism, it must be applied wisely and consistently, because will effect increase to income decreasing or smoothing. Likewise, empowerment of expert audit committee and independent commissioner needs to be done properly to balance the use of flexibility in accounting standards with the avaibility of quality financial reports. Because, in SOEs, even they have implemented GCG, they have not been able to reduce the opportunistic earnings management.
... The Size of Audit Committee (ACSZ) is measured as the number of AC members because research suggests that a large AC tends to enhance the AC's function [37]. ...
The purpose for this paper is to recognize female presence in ACs and experience female CFO as working in ACs as a chief in Audit firms, impact of the female with Audit fee and non-audit fee on audit quality, just as their relationship with financial reports of the non-financial sector of Pakistan. Using a combination of publicly available and manually collected data, using OLS regression, Fixed Effects Regression and Random effects and the Pakistan non-financial industries subsequently 2015 to 2019.Results show that this investigation tracks down an affirmative relationship between female directors on ACs and AQ. More, it proves that this affiliation is reliant upon the community bookkeeping aptitude of female ACs individuals and female presence in the ACs. This research adds to AQ literature and to the exploration distinguishing attributes driving female directors' checking. In addition, it adds to the clashing proof identified with female accounting specialists on ACs and accounting reports observing, that the outcomes propose that the blended proof might be determined by the scientists' inability to isolate economic ability. Likewise adds to the discussion on economic or non-economic mastery improves economic detailing observing. Additionally, it applies the hypothetical structure of uniting RDT (resource dependence theory) and AT (agency theory) to women directors on ACs. Moreover, the investigation upholds strategy producers' endeavors towards more noteworthy presence of Women directors, it suggests this they ought to likewise deliberate the public bookkeeping aptitude of women directors.
The current study investigates how board gender diversity moderates the relationship between corporate governance mechanisms (CG) and earnings management (EM) practices of firms in sub-Saharan Africa. The study samples annual reports and financial statements of 52 firms from nine sub-Saharan African countries over a period of 2007 to 2019 giving a total of 676 observations. Panel data models are used in the analyses. The study finds that, board gender diversity matters and significantly moderates the relationship between CG and EM practices of firms in sub-Saharan Africa. The findings of the study support the agency theory proposition that the constraining effect of firms’ EM practices may be contingent on CG systems, particularly board gender diversity. The current study is the first African multi-cross-country study to introduce gender diversity as a moderating variable in the CG—EM nexus, thus extending the agency theory. It further contributes to the emergent advocacy for competent female representation on corporate boards so as to benefit from their essential characteristics and skills that drive their superior monitoring abilities, including EM monitoring.
I examine whether audit committees (ACs) improve financial reporting reliability by utilizing an internal audit function (IAF) as a resource and use semistructured interviews with chief audit executives and AC chairs to develop an understanding of the nature of AC-IAF relations. Using AC charters, I measure AC interaction with IAFs, finding improvement in financial reporting reliability for firms that introduce a new IAF under a New York Stock Exchange (NYSE) mandate. This improvement is limited to firms with significant interaction between ACs and new IAFs. Using detailed hand-coded data, I investigate the different kinds of interactions between ACs and IAFs, finding evidence of the importance of private meetings to review the IAF's scope, findings, and recommendations. The value of the IAF as a resource to the AC is greater when the AC ensures free and open communication, promotes IAF independence, and stands in greater ex ante need of monitoring assistance.
JEL Classifications: G39; M40; M41.
The corporate collapses and failures experienced in the banking industry amid the organizational performance have been a major concern. The study aimed at ascertaining the performances of banks and determining the effect of board size, board composition and organizational performance of selected banks in Nigeria. The methodology adopted was combination of both descriptive design and ex-post facto research. A sample of 6 deposit money banks was purposively selected for a period of 6 years. The data were obtained from the annual reports of the selected deposit money banks. Both descriptive statistics and ratio analysis were used to analyze collated data. Hypotheses were tested by multiple regression and Pearson product moment correlation methods. The finding of the study revealed that there is a positive relationship between Board Composition with performance of selected Banks, while Board Size showed negative significant relationship with performance of selected Banks respectively. The study concluded with recommendations that Corporate Governance Mechanism and Code of Best practices contributed a good deal to the performance of Banks – that the managers of Selected Banks should adopt Corporate Governance principle and best practices as integral parts of managing banks for both effective and efficient service delivering, thus striking a balance between organization’s objective and the stakeholder’s interest.
Purpose: The main objective of this study is to investigate the relationship between audit committee characteristics and comparability of financial statement with the moderating role of audit firm size and corporate governance. Methods: In this study, have been investigated 56 firms listed on Tehran stock exchange during the years 2013 to 2017 and To estimate research hypothesis, is used a multivariable regression model. Results: Results of the study indicate that there is a negative and significant relationship between audit committee characteristics and financial statements comparability. However, audit firm size has a negative effect on relationship between audit committee characteristics and financial statement comparability and finally, board size has a positive effect on relationship between audit committee expertise and financial statement comparability and independent board has a negative effect on relationship between audit committee size and financial statement comparability. Conclusions: Reducing financial statement comparability stem from less effectiveness audit committees. Contribution: Despite the effect performance of audit committees on quality characteristics of financial statements, need attention to the effectiveness of audit committees is very important.
We empirically investigate how regulatory oversight on external auditors is jointly influenced by audit committee financial expertise and independence. To measure regulatory oversight on external auditors, we use comment letters issued by the Securities and Exchange Organization of Iran. We show that audit committee financial expertise increases (decreases) regulatory oversight on external auditors when audit committee independence is low (high). We further show that this interactive effect is stronger under higher regulatory reviewers’ workload compression. Collectively, our findings suggest that, first, financial expertise and independence of audit committees should be analysed together as independence moderates the benefit of financial expertise. Second, the consideration of regulatory reviewers’ workload compression is important in this analysis.
This study aims to obtain information and empirical evidence about the association of managerial overconfidence on earnings management and the effect of moderating the effectiveness of the audit committee. This study uses 1938 observations of companies listed on the Indonesian stock exchange for six periods from 2013 to 2018. The analysis technique used in this study is a moderated regression analysis using SPSS 25 software. This study finds that managerial overconfidence has a significant positive association. on earnings management, this is due to managerial overconfidence who feels he is better than other parties so that they ignore the realistic evaluation, when an investment project is not as estimated, they will perform earnings management to cover their miscalculations. Furthermore, the audit committee was unable to reduce the positive association of managerial overconfidence on earnings management, from the research data it was found that the company only met a few criteria for the effectiveness of the audit committee. Keywords: Managerial, Overconfidence, Earnings Management, Good Corporate Governance, Audit Committee
The events that began with the collapse of Enron, WorldCom, Tyco, and Adelphia and continued into the financial crisis of 2008 teach us an important lesson: corporate governance matters. Although it is widely acknowledged that good corporate governance is a linchpin of good corporate performance, how can one improve corporate governance and its impact on corporate and overall economic performance. This book offers a diverse and forward-looking set of approaches from experts, covering the major areas of corporate governance reform and analyzing the full range of issues and concerns. Written to be both theoretically rigorous and grounded in the real world, the book is well suited for practicing lawyers, managers, lawmakers, and analysts, as well as academics conducting research or teaching a wide range of courses in law schools, business schools, and economics departments.
This paper examined the impact of Audit Committee Characteristics on Earning Management of listed Foods and Beverages Firms in Nigeria, using annual data covering a period of 2014-2019. Generalised Least Square (GLS) estimator was used in estimating the parameters. The paper reveals that a positive and significant relationship exist between Audit Committee independence (ACIND), Audit Committee meetings (ACMT) AND Earnings Management of Listed Foods and Beverages Firms in Nigeria. The paper further revealed a negative association between Audit Committee Size, Audit Committee Financial Expertise, Firm Size and Earnings Management of Listed Foods and Beverages Firm in Nigeria. The paper further recommends that the composition of Audit for the committee members should be clearly spelt out to enable members perform their functions effectively
This study provides evidence on whether sustainability-oriented corporate governance mechanisms impact the voluntary assurance of corporate sustainability reports. Specifically, we consider the presence and characteristics of environmental committees on the Board of Directors and a Chief Sustainability Officer (CSO) among the management team. When examining assurance services, we make a distinction between those services performed by professional accountants, consultants, and internal auditors. We find that the presence of a CSO is positively associated with corporate sustainability report assurance services, and this association increases when the CSO has sustainability expertise. Supporting the position that some firms establish sustainability-related governance merely to conform to socially desired behavior, we find that only those environmental committees containing directors with related expertise influence the likelihood of adopting sustainability assurance. Presently, environmental committees with greater expertise appear to prefer the higher-quality assurance services of professional accounting firms. Expert CSOs, on the other hand, prefer assurance services from their peers with sustainability expertise, as evidenced by their choice to employ consultants. When analyzing firms' environmental contextual characteristics, we find that firms employing a CSO and exhibiting poor environmental performance, relative to other firms in their industry, prefer to report sustainability results without assurance. While we do find that larger firms in the U.S. are significantly less likely to employ assurance, this result decreases over time. Further, we provide initial evidence that the value-relevance of sustainability assurance is increasing with time.
Several calls from practitioners and the relevant literature suggest that audit committee directors with industry expertise complement the knowledge of financial experts. Thus, this study examines market reactions to the voluntary appointment of new audit committee directors with financial and industry expertise in Germany. Using hand‐collected German data on newly appointed audit committee director announcements, we find a significantly positive market reaction around the appointment of financial experts with industry expertise but no reaction around the appointment of financial experts without industry expertise. Consistent with the expectation that some industries demand a higher need for specialised directors, we find a positive market reaction to the appointment of financial experts with industry expertise depending on whether the appointing firm is relatively more challenging for non‐industry experts to monitor and advise. Overall, our findings suggest that market participants demand a combination of financial and industry expertise.
This paper examines the impact of the audit committee’s effectiveness (ACE) on the performance of Malaysian Takaful companies licensed by the Central Bank of Malaysia. In addition, this study investigates the moderator role of Shariah Committee Quality (SCQ) on the relationship between ACE and performance. The study uses a sample of 11 Malaysian Takaful from 2010 to 2017. Performance is proxied using return on assets and return on equity, while ACE is measured via four attributes, mainly audit committee (AC) chairman specialization, size, independence, and meeting. Furthermore, SCQ is quantified via an index based on six attributes. To answer our research questions, a panel fixed effect regression is used. Our results show that ACE positively affects performance. At the individual level, a larger and more independent audit committee positively related to performance of Malaysian Takaful companies. However, AC meeting and chairperson specialization do not affect performance. Moreover, Shariah Committee Quality positively moderates the relationship between ACE and Malaysian Takaful companies. Results provision the important role played by AC in boosting performance. Our findings are of great importance to Malaysian regulators to enhance the existing corporate governance effectiveness by directing Takaful companies to establish robust and high-quality audit and Shariah committees. This research provides a new understanding regarding AC as a component of CG and its relationship with performance. This study is supposed to fill the gap in corporate governance by testing the impact of AC effectiveness on performance and its implementation in Malaysia especially in the Takaful sector. Besides, this study brings additional evidence of the influence of AC on performance, which is moderated by SCQ.KeywordsMalaysian Takaful companiesShariah committee qualityAudit committeeROAROE
This study examines whether corporate social responsibility (CSR) committees associate with the external assurance of CSR reports. Specifically, we consider the presence and effectiveness of CSR committees. Using a sample of Australian firms over the period 2004-2016, we show the mere presence of a CSR committee is not related to the external assurance of CSR. However, CSR committee effectiveness is positively related. In addition, firms with higher CSR committee effectiveness are more likely to seek external assurance provided by the Big4 accountancy firms and acquire financial audit and CSR assurance services from the same provider. Taken together, CSR committee effectiveness plays an active role in CSR assurance services. Our results are particularly relevant to those with interests in understanding the demand and choice of external CSR assurance services, as well as the impact of corporate governance mechanisms on these services.
This study explores the underlying drivers of the tone of corporate social responsibility (CSR) narratives by considering four corporate governance mechanisms and examining whether there is a relationship between environmental, social, and governance (ESG) disclosure and the CSR narrative tone based on a sample of UK firms from 2008 to 2017. The results show that more independent directors would lead to a less optimistic language (positive tone) and a more pessimistic language (negative tone) in the CSR report. The results also show that a higher ESG disclosure score leads to a more positive CSR narrative tone. However, gender diversity has a positive impact on the positivity of CSR tone when the ESG score is medium or high and when the board size exceeds 10 members. These findings are relevant for policymakers, investors, and firm managers. For instance, the findings inform regulators and policymakers about the relevant governance mechanisms that affect the tone of CSR reports.
La Imaginación Motora es el acto de imaginar una acción sin ejecutar el acto
físico. La práctica con Imaginación Motora acelera el aprendizaje y mejora las destrezas
motrices. Previo a ello, es necesario evaluar la capacidad de los individuos para
formarse imágenes mentales. El objetivo de este trabajo es realizar la primera fase del
proceso de adaptación transcultural al español del cuestionario en inglés “Kinesthetic
and Visual Imagery Questionnaire (KVIQ).
El “Kinesthetic and Visual Imagery Questionnaire (KVIQ) es un test que evalúa
la habilidad de la Imaginación Motora compuesto por 20 ítems agrupados en 2 dimensiones.
Ha sido diseñado para ser aplicado en personas con movilidad reducida. Para el desarrollo de la versión preliminar se utilizó la metodología traducción-retrotraducción
por 4 traductores independientes, bilingües y nativos en el idioma de destino, seguido
del consenso de un comité de expertos en las discrepancias para alcanzar una equivalencia
semántica y cultural.
No se encontraron problemas destacables en la traducción al español. La palabra
“imagery” causó conflicto en el comité y finalmente se optó por traducir como
“imaginación”. Se mantuvo la traducción literal en el 30% de los ítems; una traducción
semejante que no altera el significado en el 40%; se añadieron elementos y descartaron
otros en el 20% y se modificaron el 10% por una nomenclatura anatómica en
español más correcta.
La versión preliminar obtenida en español es semejante semánticamente a la
original. Es necesario realizar el estudio piloto que valide lingüísticamente la versión
y explore inicialmente sus propiedades psicométricas.
This work studies the impact of corporate governance (audit committee) on real earning management among companies recorded on the Amman stock exchange in Jordan. Wherein, the sample consisted of 92 firms from the industrial and service companies from the period 2009 to 2018. Corporate governance examined through the audit committee size, meetings and gender, whereas real earning management has been quantified using cash flow from operations. In the present study formed by agency theory and employing the panel data method. The findings illustrate that the audit committee size and gender have a negative and significant relationship with real earning management. While the relationship between the meetings of the audit committee and real earning management is significantly positive. This paper provides empirical evidence to help executives, stakeholders make decisions. Consequently, these results offer evidence for the Jordanian executives, investors, and regulators.
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