Does shared tenure between audit committee chair and engagement partner affect audit outcomes? Evidence from the UK

2021 ◽  
pp. 101067
Author(s):  
Salem Alhababsah ◽  
Alaa Alhaj-Ismail
Keyword(s):  
Audit Committee ◽  
Committee Chair ◽  
The Uk

Placing sustainable development at the heart of government in the UK: the role of law in the evolution of sustainable development as the central organising principle of government

Legal Studies ◽  
2002 ◽  
Vol 22 (4) ◽  
pp. 578-601 ◽  
Author(s):  
Victoria Jenkins
Keyword(s):  
Sustainable Development ◽  
Audit Committee ◽  
Legal Framework ◽  
Legal Obligations ◽  
Statutory Duty ◽  
The Government ◽  
The Uk ◽  
Clear Statement ◽  
Close Investigation

The government has made a commitment to ensure that sustainable development is placed at the heart of decision-making. The UK's strategy has primarily involved the development of voluntary measures to achieve sustainable development in policy-making. These measures are monitored by a Sustainable Development Commission and, most importantly, a parliamentary Environmental Audit Committee. However, a number of public bodies also have a statutory duty in respect of sustainable development. These duties do not create enforceable legal obligations, but may have significant value as a clear statement of policy on the achievement of sustainable development – providing political leadership at the highest level. It is essential to this aim that the government provides a clear message regarding the objective of sustainable development. However, close investigation of these duties reveals not only a partial legal framework, but a number of inconsistencies in the government's approach to the achievement of sustainable development.

scholarly journals An Examination of the Effects of Change in Committee Chair on Audit Quality

2017 ◽  
Vol 6 (4) ◽  
pp. 52
Author(s):  
Izhar Haq ◽  
Teresa Lang ◽  
Hongkang Xu
Keyword(s):  
Audit Committee ◽  
Audit Quality ◽  
Financial Statements ◽  
Discretionary Accruals ◽  
Committee Chair ◽  
The Absolute ◽  
Predicted Values ◽  
The Relationship ◽  
A Company

This study uses GMI Ratings directorship data from 2008 to 2013 along with the associated financial data to examine the relationship between audit committee chair change with the absolute discretionary accruals in the financial statements of the reporting companies.  Our results suggest that audit committee chair change is positively associated with the absolute discretionary accruals.  Specifically, absolute discretionary accruals are significantly higher when there is a change in the audit committee chair.  These results are consistent with prior research that deviations from the predicted values of accruals is an indicator of “poor” audit quality.  An additional finding of this paper is that a person younger than 60 is more likely to be a new audit committee chair when there is a change and therefore will have less experience and contacts than the outgoing chair. An important implication of these results is that audit committee chair change can have a significant impact on the quality of the financial statements of a company as well as on the audit quality.

scholarly journals Determinants of the extent of forward looking information: Evidence from UK before financial crisis

2016 ◽  
Vol 13 (3) ◽  
pp. 17-32
Author(s):  
Suzan Abed ◽  
Basil Al-Najjar
Keyword(s):  
Information Asymmetry ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Empirical Investigation ◽  
Growth Opportunities ◽  
Cross Listing ◽  
Corporate Size ◽  
The Uk ◽  
Financial Firm ◽  
Forward Looking

The study aims to propose a multi-theoretical framework based on information asymmetry and institutional theories by focusing on the OFR regulation changing period from 2004-2006. We carry out an empirical investigation to detect the extent of forward-looking information for a sample of 690 UK non-financial firm-year observations which are drawn from the top 500 UK. We show that the extent of voluntary disclosure of Forward Looking (FL) information is positively and significantly associated with growth opportunities, leadership, audit committee, competition rate, corporate size, and cross-listing. However, the extent of FL information is negatively and significantly associated with blockholders. This paper applies a multi-theoretical lens based on information asymmetry and institutional theories are employed in order to identify potential new determinants of voluntary disclosure in regards to forward-looking information in the UK context.

scholarly journals Factors affecting the voluntary use of internal audit: evidence from the UK

2018 ◽  
Vol 33 (3) ◽  
pp. 288-317 ◽  
Author(s):  
Hazem Ramadan Ismael ◽  
Clare Roberts
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
Theoretical Framework ◽  
Policy Implications ◽  
Content Type ◽  
Factors Affecting ◽  
The Uk

Purpose This study aims to identify the factors that lead non-financial companies listed in the UK to use an internal audit function (IAF) as a monitoring mechanism. Although the use of an IAF in the UK is voluntary, no prior research has examined the drivers for using one. Design/methodology/approach Financial and non-financial data were collected from the annual reports of 332 UK non-financial companies listed on the London Stock Exchange (LSE) Main Market. Univariate tests and multivariate logistic regression tests were used to test the research hypotheses. A theoretical framework based on both agency theory and transaction cost economics (TCE) theory was used to explain the economic factors affecting the use of an IAF. Findings The study provides evidence that firm size, level of internal risks, agency problem between owners and managers and existence of an effective audit committee are associated with the existence of an IAF. Thus, the need to have strong internal control and risk management systems and to reduce both internal and external agency costs drives companies to have an IAF. These results suggest the importance of IAF as an internal corporate governance tool and the effectiveness of UK governance regulations in monitoring the effectiveness of internal control systems. Practical implications Given the importance of the IAF’s corporate governance role, the study provides some policy implications. Regulators should pay more attention to the issue of maintaining an IAF, especially by large companies, the relationship between the IAF and other governance parties, especially the audit committee, and the disclosure of more relevant information about the IAF’s characteristics and practices. Originality/value This is the first study to examine the factors affecting the existence of the IAF within the UK’s distinctive regulatory approach of “comply or disclose reasons”. Furthermore, it provides a theoretical framework that explains how both the agency theory and TCE theory can interpret the adoption of internal audit.

scholarly journals Audit committee diversity and corporate scandals: evidence from the UK

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Craig McLaughlin ◽  
Stephen Armstrong ◽  
Maha W. Moustafa ◽  
Ahmed A. Elamer
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Corporate Fraud ◽  
Content Type ◽  
Corporate Scandals ◽  
Corporate Scandal ◽  
Binary Regression Analysis ◽  
And Gender ◽  
The Uk

Purpose This paper aims to empirically analyse specific characteristics of an audit committee that could be associated with the likelihood of corporate fraud/scandal/sanctions. Design/methodology/approach The sample includes all firms that were investigated by the Financial Reporting Council through the audit enforcement procedure from 2014 to 2019, and two matched no-scandal firms. It uses logistic binary regression analysis to examine the hypotheses. Findings Results based on the logit regression suggest that audit member tenure and audit committee meeting frequency both have positive associations to the likelihood of corporate scandal. Complementing this result, the authors find negative but insignificant relationships amongst audit committee female chair, audit committee female members percentage, audit committee qualified accountants members, audit committee attendance, number of shares held by audit committee members, audit committee remuneration, board tenure and the likelihood of corporate scandal across the sample. Research limitations/implications The results should help regulatory policymakers make decisions, which could be crucial to future corporate governance. Additionally, these results should be useful to investors who use corporate governance as criteria for investment decisions. Originality/value The authors extend, as well as contribute to the growing literature on the audit committee, and therefore, wider corporate governance literature and provide originality in that it is the first, to the knowledge, to consider two characteristics (i.e. remuneration and gender) in a UK context of corporate scandal. Also, the results imply that the structure and diversity of the audit committee affect corporate fraud/scandal/sanctions.

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