Experience of Audit Committee Members and Audit Quality

Sultana, Nigar; Singh, Harjinder; Rahman, Asheq

doi:10.1080/09638180.2019.1569543

Cited by 63 publications

(79 citation statements)

References 54 publications

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“…The result conforms to the arguments of [45] as he stated that women do have better communicative skills and capabilities within and among different groups. The result also corroborates with the findings of [48,24,52] and [15] as they revealed in their studies that the presence of a mixed audit committee team (that is, mixture of both men and women) usually demands higher audit services from the external auditor thereby increasing the amount of audit fee. The result contradicts the findings of [46,47,24] and [13] where they revealed that the presence of women on audit committee structure would improve internal control and monitoring of management, reduce audit risk, thereby leading to reduction in audit fee.…”

Section: Random-effect Regression Resultssupporting

confidence: 89%

“…The dependent variable for this study is audit fee which was measured using the natural logarithm of the audit fee paid by the sample banks to their auditors during the period covered by the study. The previous empirical studies [47,48] and [24,13,11] and [25] had measured audit fee in the same way. The independent variable was audit committee effectiveness which was a proxy for audit committee expertise, audit committee diligence and audit committee gender diversity.…”

Section: Materials Methods and Methodologymentioning

confidence: 99%

“…Large audit firms usually have more resources at their disposal, attract more employees to cover large audit services, have competent staff to tackle difficult audit work and always try as much as possible to protect their reputations from failed audit service. Since they have their reputation at stake, in both local and international markets, this could prompt the audit firm to charge higher audit fee as they are less likely to be compromised by their client, thereby providing better audit service compared to small audit firms, that is, non-Big4 audit firms [33,27,1,36,48]. Audit firm size is measured by a dummy variable of one [1] and zero (0).…”

Section: Materials Methods and Methodologymentioning

confidence: 99%

“…For instance, the studies of [46,47] and [13] found that the presence of female members on the audit committee team improved the effectiveness of internal control activities, reducing the inherent risk of misstatement as well as reducing the auditor's assessment of audit risk and audit effort, thereby reducing audit fees. In contrast, the studies of [48,24] and [15] revealed that the presence of women on the audit committee strengthened the quality of financial reporting by demanding more audit efforts and high audit quality from the auditor, thereby resulting in a higher audit fee. From the foregoing, this study hypothesised that: H3: Audit committee gender diversity has significant influence on audit fee.…”

Section: Hypotheses Developmentmentioning

confidence: 96%

“…Based on the previous empirical studies reviewed, it could be deduced that there are few studies [46][47][48]24,13] and [15] on the effect of audit committee gender diversity on audit fee and reported divergence results. For instance, the studies of [46,47] and [13] found that the presence of female members on the audit committee team improved the effectiveness of internal control activities, reducing the inherent risk of misstatement as well as reducing the auditor's assessment of audit risk and audit effort, thereby reducing audit fees.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

See 4 more Smart Citations

Audit Committee Effectiveness and Audit Fee among Listed Deposit Money Banks in Nigeria

Mustapha¹,

Isiaka²,

Babatunde³

2020

AJEBA

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The persistent cases of corporate accounting scandals which have rocked the Nigerian banking sector in spite of auditor certification of financial statements as free from material error have raised concern not only on the effectiveness of audit committees but also on audit services despite the huge amount charged on their clients. Hence, this study examined the effect of audit committee effectiveness on audit fee of listed deposit money banks in Nigeria. Using an ex-post facto research design, the data sourced through the annual reports of twelve (12) banks for the period between 2012 and 2018 were analysed using random-effect regression analysis. The result of the study revealed that audit committee effectiveness proxy with audit committee audit committee expertise (t-value =3.22 & p-value = 0.000), audit committee diligence (t-value = 3.57, & p-value = 0.000) and audit committee gender diversity (t-value = 3.85 & p-value =0.000) has significant positive effect on audit fee of listed deposit money banks in Nigeria. This implies that an effective audit committee would demand for high audit quality service from the auditor, thereby increasing the audit efforts and time which subsequently result to higher audit fee. The study concluded that an effective audit committee would demand high audit service from the external auditor thereby ensuring that the financial statement published is relevant and of faithful representation.

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Section: Random-effect Regression Resultssupporting

confidence: 89%

Section: Materials Methods and Methodologymentioning

confidence: 99%

Section: Materials Methods and Methodologymentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 96%

Section: Hypotheses Developmentmentioning

confidence: 99%

See 3 more Smart Citations

Audit Committee Effectiveness and Audit Fee among Listed Deposit Money Banks in Nigeria

Mustapha¹,

Isiaka²,

Babatunde³

2020

AJEBA

View full text Add to dashboard Cite

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Age diversity of audit committee financial experts, ownership structure and earnings management: Evidence from China

et al. 2021

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The extant literature has shown the impact of demographic characteristics such as gender of audit committee members on earnings management but ignored the importance of the board room's age diversity. Going beyond the prior literature, our study aims to examine how the age diversity of audit committee financial experts (ACFEs) influences the financial reporting quality of Chinese non-financial firms. We found a negative relationship between ACFEs' age diversity and earning management. Our findings also show that younger ACFEs mitigate earnings management as compared to older ACFEs. We further examined this relationship among state-owned enterprises (SOEs) and privately-owned enterprises in China and confirmed that the age diversity of ACFEs influences earnings management differently. However, younger ACFEs working in SOEs mitigates earnings management than their counterpart in privately-owned companies. Our result maintains its robustness after controlling for endogeneity and employing a different measure of earnings management. Our result has relevance for selecting financial experts and the overall composition of the audit committee, showing that including younger ACFEs will ensure more efficient control of firms' management. This finding is also relevant for policymakers, especially Chinese regulators, offering them insight into promoting audit committee effectiveness.

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The impacts of business ethics and diversity on ESG disclosure: Evidence from Hong Kong

Cheung

Lai²

2023

J Corp Accounting Finance

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This paper investigates the effects of board cultural diversity, audit committee experience diversity as well as business ethics on the effectiveness of oversight quality on ESG performance. Using Generalized Moments of Methods (GMM), we examine the ESG performance of the firms listed in the Hong Kong Hang Seng Composite Index between 2010 and 2015. We find that board cultural diversity and business ethics have positive correlations with ESG performance while audit committee experience diversity has a negative correlation with ESG performance. In our additional analysis, we observe that board cultural diversity is critical for improving social performance and business ethics is essential for improving environmental and social performance. However, audit committee experience diversity limits firm performance in three areas (environmental, social, and governance) of ESG performance. This is the first study that provides insights to both policymakers and practitioners by highlighting the importance of optimizing the levels of diversity and mandating the improvement of business ethics.

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Experience of Audit Committee Members and Audit Quality

Cited by 63 publications

References 54 publications

Audit Committee Effectiveness and Audit Fee among Listed Deposit Money Banks in Nigeria

Audit Committee Effectiveness and Audit Fee among Listed Deposit Money Banks in Nigeria

Age diversity of audit committee financial experts, ownership structure and earnings management: Evidence from China

The impacts of business ethics and diversity on ESG disclosure: Evidence from Hong Kong

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