Audit Committee Diversity toward Voluntary Disclosure Reporting with Existence of Regulatory Regime as Moderation Variable: a Critical Review

Abstract

The audit committee is a fundamental and prerequisite tool for fulfilling board’s monitoring role of ensuring transparency, financial and managerial efficiency. Therefore, it has been applied to address perceived governance failure. This paper aims to critically review the previous literature on the relationship between audit committee diversity as a major corporate governance mechanism and corporate voluntary disclosure reporting (CVDR) with a change in the regulatory regime as moderation variable. This review specifically evaluates theoretical and empirical literature related to audit committee diversity such as independence, financial expertise, accounting expertise; and CVDR in order to highlight some important areas of gaps for future research in this field. It also, emphases the need for a more qualitative method for better understanding of the relationship. This paper proposes that examining the moderating influence of the change of the regulatory regime with regard to CVDR would provide more insight into the link between audit committee diversity and CVDR. The policy implication of the study is also discussed. Lastly, the paper stresses the importance of future studies linking audit committee diversity and CVDR, which are quite scanty the existing literature.

Drivers of corporate voluntary disclosure: a systematic review

“…As presented in Table 4, a large proportion of the literature (90%) is based on a quantitative methodology. The rest includes five qualitative research (Alshbili and Elamer, 2020; Gutierrez Huerter O, 2017; Parsa et al , 2020; Situ et al , 2020a, 2020b), one mixed-method (Dissanayake et al , 2020), two descriptive studies (Jensen and Berg, 2012; Nwobu et al , 2018), one non-empirical (Khan et al , 2014), four review research (Ali et al , 2017; Guidry and Patten, 2012; Hahn and Kühnen, 2013; Kabara et al , 2019) and one meta-analysis research (Fifka, 2013). With regard to the data source in quantitative studies, out of 120, only 13 studies relied on a primary source of data (questionnaire) (Gunawan, 2015; Tauringana, 2020).…”

“…Other existing review studies have focused on a limited number of years, contexts or determinants (Hahn and Kühnen, 2013; Fifka, 2013; Guidry and Patten, 2012; Kabara et al , 2019; Ali et al , 2017). Kabara et al (2019) limited their critical review to the audit committee and board diversity as determinants of VD. Similarly, Samaha et al (2015) focused on the board and audit committee characteristics.…”