Audit committee expertise in large European firms

2020 ◽  
Vol 35 (9) ◽  
pp. 1313-1341
Author(s):  
César Zarza Herranz ◽  
Felix Lopez-Iturriaga ◽  
Nuria Reguera-Alvarado
Keyword(s):  
Audit Committee ◽  
Design Methodology ◽  
Current Knowledge ◽  
Committee Member ◽  
Audit Fees ◽  
Continuous Variable ◽  
Full Time ◽  
Audit Process ◽  
Content Type ◽  
Auditor Rotation

Purpose This paper aims to study how audit committee member expertise is related to certain features of the committee and to the audit process. Design/methodology/approach Based on information from 2,477 directors from 296 firms in eight European countries between 2005 and 2014, this study measures average audit committee expertise using a continuous variable, which combines education-based and experience-based expertise. Different measures of the audit process are then regressed against this and other control variables. Findings Average committee expertise has increased in recent years. Education-based and experience-based expertise seem to be complementary. Results also show that committees with greater expertise meet more frequently, have fewer directors with full-time dedication and pay lower audit fees. There is no link to changes in the external firm audit, which may be due to mandatory auditor rotation. Originality/value The paper provides a comprehensive metric of audit committee expertise that includes directors’ academic background, professional experience and qualifications. In addition, this study expands current knowledge concerning whether and how committee expertise affects the audit process.

scholarly journals Banks’ audit committees, audit firm alumni and fees paid to audit firm

2019 ◽  
Vol 34 (7) ◽  
pp. 783-807 ◽  
Author(s):  
Kim Ittonen ◽  
Emma-Riikka Myllymäki ◽  
Per Christen Tronnes
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Design Methodology ◽  
Audit Fees ◽  
Audit Committees ◽  
Committee Chair ◽  
Content Type ◽  
Audit Firm ◽  
Audit Firms ◽  
Non Audit Services

Purpose This paper focuses on bank audit committees and examines whether audit committee members who are former auditors are associated with the acquisition of audit and non-audit services from their former employers. Design/methodology/approach The study empirically examines a sample of large banks that are included in the S&P Composite 1500. Findings The paper reports significantly lower audit fees and a higher proportion of non-audit fees to total fees when the audit committee chair is an alumnus of the incumbent audit firm. Moreover, additional analysis reveals that these findings are stronger for banks with more earnings management. Research limitations/implications Overall, the findings indicate that audit firms might consider banks using their alumni as audit committee chairs to be less risky or easier to audit, thus requiring relatively less effort from the auditors. The reduced effort required to audit clients with audit firm alumni on their audit committees then has the effect of reducing the audit fees charged. Alternatively, their auditing experience and cognitive proximity might influence the assessment of the need for auditing or the ability to negotiate lower audit fees on the part of audit firm alumni. Originality/value This paper provides empirical evidence of the association between audit firm alumni in influential positions on an audit committee and fees paid to those audit firms in the banking industry. The findings contribute to the literature by suggesting that banks with affiliated former auditors chairing their audit committees not only have significantly lower audit fees but also a higher proportion is spent on non-audit services.

Effect of audit and compensation committee membership overlap on audit fees

2017 ◽  
Vol 25 (1) ◽  
pp. 34-57 ◽  
Author(s):  
Rachana Kalelkar
Keyword(s):  
Audit Committee ◽  
Committee Member ◽  
Negative Relationship ◽  
Reporting Quality ◽  
Audit Fees ◽  
Audit Pricing ◽  
Audit Risk ◽  
Content Type ◽  
Compensation Committee ◽  
Committee Membership

Purpose Recent studies document that approximately two-thirds of sample firms have at least one audit committee member serving on their compensation committee (Liao and Hsu, 2013). Prior studies on overlap membership document that presence of audit committee members on compensation committee affects the reporting quality. Since auditors’ audit risk is affected by reporting quality. The purpose of this paper is to examine how the auditors perceive the overlap of audit and compensation committee members when pricing audit fees. Design/methodology/approach The author use a sample from 2007 to 2012 and run an OLS regression. Findings The author find a negative association between overlap membership and audit fees. The results are robust after controlling for selection bias, alternate measurement of overlap membership, and an alternate pre- and post-overlap membership test. Additional tests show that the negative relationship between overlap membership and audit fees is explained by lower audit risk and not by lower brand premium of non-Big4 auditors and that the benefit of overlapping membership increases when the audit committee size is large. Practical implications The findings suggest that firms with large audit committee can improve their reporting and lower their audit fees by having audit committee members on compensation committee. Originality/value The findings contribute to the literature on the consequences of overlap membership and on the ongoing debate about the extent that common membership enhances audit committee monitoring. It also adds to the limited literature on audit committee and audit pricing.

scholarly journals Exploring producers' motivations and challenges within a farmers' market

2020 ◽  
Vol 122 (7) ◽  
pp. 2089-2103
Author(s):  
Rosario Michel-Villarreal ◽  
Eliseo Luis Vilalta-Perdomo ◽  
Martin Hingley
Keyword(s):  
Design Methodology ◽  
Farmers Markets ◽  
Full Time ◽  
Structured Interviews ◽  
Farmers Market ◽  
Content Type ◽  
Food Supply Chains ◽  
Part Time ◽  
Short Food Supply Chains

PurposeThe purpose of this study is to explore food producers' motivations and challenges whilst participating in short food supply chains (SFSCs). This paper compares findings with previous literature and investigates the topic in the context of producers' motivations.Design/methodology/approachThe paper includes a literature review concerning producers' motivations to engage in SFSCs. A case study was designed to investigate motivations underlying producers' engagement in SFSCs, as well as the challenges that they face. Semi-structured interviews were conducted in a farmers' market located in Mexico. Thematic analysis is used to identify the principal issues for producers'. Propositions based on findings are presented.FindingsFindings suggest that small, large, part-time and full-time producers are willing to engage with farmers' markets for diverse primary economic and non-economic motivations. Individual and collective challenges were also identified.Originality/valueThis research helps to explain producers' motivations and challenges within SFSCs in an under-researched context, namely a focus on producers' and in the Global South.

Service quality, loyalty, and co-creation behaviour: a customer perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rafael P. Albuquerque ◽  
João J. Ferreira
Keyword(s):  
Service Quality ◽  
Design Methodology ◽  
Positive Impact ◽  
Current Knowledge ◽  
Quantitative Methodology ◽  
Content Type ◽  
Customer Perspective ◽  
The Subject ◽  
Customers Perspective

Purpose This paper aims to verify co-creation behavior and understand a relationship between perception of service quality, loyalty and co-creation, from Starbucks customers' perspective. Design/methodology/approach A quantitative methodology was carried out, operationalized by applying a questionnaire to a sample of 385 respondents. Findings The results showed that service quality has a positive impact on loyalty and co-creation behavior in all its aspects; loyalty can be considered an important attribute in the intention of co-creation by customers. Originality/value This research extends the current knowledge on the subject and examines the associations between other attributes discussed. The implications of the study suggest strategic directions for using the clients' co-creation as a competitive alternative and generating value.

scholarly journals The effect of company characteristics and auditor characteristics to audit report lag

2019 ◽  
Vol 4 (1) ◽  
pp. 129-144 ◽  
Author(s):  
Muhammad Rifqi Abdillah ◽  
Agus Widodo Mardijuwono ◽  
Habiburrochman Habiburrochman
Keyword(s):  
Audit Committee ◽  
Linear Regression Method ◽  
Manufacturing Companies ◽  
Audit Report ◽  
Audit Process ◽  
Industry Specialization ◽  
Content Type ◽  
Financial Condition ◽  
Auditor Characteristics ◽  
Auditor Reputation

Purpose The purpose of this paper is to examine and analyze the factors that affect an auditor’s efficiency in completing the audit process proxied by audit report lag. The factors used in this study are selected by looking at the characteristics of the company and the characteristics of an auditor. Design/methodology/approach Company characteristics were proxied by the audit committee effectiveness, financial condition, accounting complexity and profitability, whereas auditor characteristics were proxied with auditor reputation, audit tenure and auditors industry specialization. Populations of this study were all manufacturing companies listed in Indonesian Stock Exchange in 2014–2016. Based on the purposive sampling method, the number of samples obtained from 231 companies was 77. Multiple linear regression method was used to analyze this study. Hypothesis testing was done by statistical t-test (partial). Findings The results showed that partially variables of the audit committee effectiveness and profitability had a significant negative effect on audit report lag while the variable financial condition had a significant positive effect on audit report lag. Meanwhile, variables of the accounting complexity, auditor reputation, audit tenure and auditors’ industry specialization did not show significant influence on audit report lag. Originality/value This study tests both company’s and auditor’s characteristic on audit report lag that as far as authors know never been tested simultaneously.

scholarly journals Females who sexually offend

2016 ◽  
Vol 18 (4) ◽  
pp. 296-300
Author(s):  
Carol Ireland ◽  
Rebecca Ozanne ◽  
Jane Ireland
Keyword(s):  
Current Literature ◽  
Design Methodology ◽  
Current Knowledge ◽  
Review Of The Literature ◽  
Content Type ◽  
Practical Implications ◽  
A Current

Purpose The purpose of this paper is to consider the current knowledge in regard to females who engage in sexually harmful behaviour (HSB). Design/methodology/approach This is a brief paper, reviewing current literature. Findings This paper argues the continual limitations in fully understanding this population. However, it suggests the importance of progressing to discuss patterns of offending as opposed to typologies. Practical implications This argues the importance of effective formulation and consideration of patterns when understanding HSB in females. Originality/value This is a current brief review of the literature, summarising key thinking in this area, and some suggested ways forward for further progression.

scholarly journals Political connections: a threat to auditor independence?

2015 ◽  
Vol 5 (2) ◽  
pp. 222-246 ◽  
Author(s):  
Effiezal Aswadi Abdul Wahab ◽  
Mazlina Mat Zain ◽  
Rashidah Abdul Rahman
Keyword(s):  
Design Methodology ◽  
Institutional Environment ◽  
Audit Fees ◽  
Auditor Independence ◽  
Political Connections ◽  
Panel Regression ◽  
Data Set ◽  
Content Type ◽  
The Relationship

Purpose – The purpose of this paper is to examine whether political connections further impair auditor independence by investigating the relationship between non-audit fees and audit fees and as to whether political connections moderate such relationship. Design/methodology/approach – This study employs panel regression analysis. The panel data set consists of 379 firm-year observations for three years from year 2001 to 2003. Findings – Based on 379 firm-year observations for the period of 2001-2003, grounded on two proxies of political connections namely politically connected firms and the proportion of Bumiputras directors, the authors find a positive and significant relationship between non-audit fees and audit fees, and the relationship becomes weaker, only for Bumiputra-dominated firms connected firms. Originality/value – This study contributes to the extant literature by examining the role of political connections in the context of auditor independence. In addition, this study is conducted in Malaysia, which provides a unique institutional environment with the existence of political connections that is built on ethnic grounds.

Asda, Morrisons and Tesco offer employees an alternative route to a degree

2014 ◽  
Vol 22 (3) ◽  
pp. 21-23
Keyword(s):  
Design Methodology ◽  
Degree Programs ◽  
Full Time ◽  
Tuition Fees ◽  
Retail Operations ◽  
Quality Work ◽  
Content Type ◽  
Job Experience ◽  
The University ◽  
Practical Implications

Purpose – This study aims to reveal how UK supermarket giants Asda, Morrisons and Tesco have teamed up with universities to launch degree courses for their non-graduate employees. Design/methodology/approach – This study explains what gave rise to the degree programs, the form they take and the results they are expected to achieve. Findings – The origins and progress of Asda’s link with Middlesex University in honors degrees in either distribution or retail operations, the Morrisons degree in management and business with the University of Bradford and Tesco’s partnership with Manchester Metropolitan University on a retail-foundation degree are charted. Practical implications – The advantages to participants of getting a university qualification at the same time as on-the-job experience have been highlighted. Social implications – In this study, some of the growing number of alternatives to the traditional three-year full-time degree program, which is becoming more attractive as university tuition fees dissuade some young people from taking a degree straight after leaving school has been dealt with. Originality/value – Demonstrates the demand for and success of quality work-based learning leading to higher-education qualifications for retail employees.

scholarly journals The influence of audit committee’s and company’s characteristic on intellectual capital disclosure

2019 ◽  
Vol 4 (2) ◽  
pp. 170-180
Author(s):  
Zahroh Naimah ◽  
Nico Acintyo Mukti
Keyword(s):  
Linear Regression ◽  
Multiple Linear Regression ◽  
Significant Influence ◽  
Intellectual Capital ◽  
Audit Committee ◽  
Design Methodology ◽  
Stock Exchange ◽  
The Other ◽  
Company Size ◽  
Content Type

Purpose The purpose of this paper is to test the influences of audit committee’s and company’s characteristic on intellectual capital disclosure (ICD) among the LQ45-listed companies in Indonesia Stock Exchange (BEI) between 2013 and 2014. Design/methodology/approach The paper employed multiple linear regression and saturation sample as the analysis methods. Findings The findings showed that size of audit committee does not significantly influence ICD; meeting frequency of audit committee positively influences ICD; and company size does not influence ICD positively. On the other hand, profitability does not significantly influence ICD; leverage has negative and significant influence on ICD; and the type of industry does not significantly influence intellectual capital disclosure. Originality/value As there are few ICD studies, this research will surely add ICD antecedents to literature.

Gender diversity on audit committees and its impact on audit fees: evidence from India

2019 ◽  
Vol 32 (4) ◽  
pp. 568-586 ◽  
Author(s):  
Seema Miglani ◽  
Kamran Ahmed
Keyword(s):  
Audit Committee ◽  
Audit Quality ◽  
Gender Diversity ◽  
Audit Fees ◽  
Ordinary Least Squares ◽  
Audit Committees ◽  
Women Directors ◽  
Least Squares Regression ◽  
Content Type ◽  
Financial Expert

Purpose The purpose of this study is to examine the relationship existing between gender diverse (women directors) audit committees and audit fees. Design/methodology/approach The authors use a sample of 200 listed Indian firms over a four-year period (2011-2014). Ordinary least squares regression is used to assess whether and how the presence of women directors on audit committees affects the fee paid to the external auditor in India. To deal with the self-selection bias, the authors use a two-stage model developed using Heckman’s (1976) method. Findings The results show a significant positive relationship between the presence of a woman financial expert on the audit committee and audit fees after controlling for a number of firm-specific and governance characteristics and potential endogeneity with the propensity-matching score analysis. From the demand-side perspective of audit pricing, the results indicate that women financial experts on audit committees increase the need for assurance provided by external auditors. Using interaction terms, the authors find that women with financial expertise on an audit committee have a stronger association with audit fees as entity becomes more complex. Research limitations/implications The findings suggest that audit committees with women financial experts are likely to demand higher audit quality, ceteris paribus. Practical implications Gender of the financial expert is critical to the audit committee’s effectiveness. The findings of this study have implications for the composition of an audit committee in a firm. Originality/value This study contributes to the extant literature by examining the less-researched topic of the association between the women representation on audit committees and audit fees. It also offers further empirical evidence that will influence the debate on the importance of gender diversity in corporations.

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