The effect of audit committee quality and internal auditor objectivity on the prevention of fraudulent financial reporting and the impact on financial reporting quality (a survey on state-owned company in Indonesia)

2015 ◽  
Vol 8 (2) ◽  
pp. 213
Author(s):  
Angrita Denziana
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Fraudulent Financial Reporting ◽  
Internal Auditor ◽  
Owned Company ◽  
The Impact

scholarly journals An Investigation on the Audit Committees Effectiveness: The Case for GLCs in Malaysia

2011 ◽  
Vol 13 (3) ◽  
pp. 287 ◽  
Author(s):  
Nurul Nazlia Jamil ◽  
Sherliza Puat Nelson
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Audit Committees ◽  
Financial Reporting Quality ◽  
Financial Expertise ◽  
Monitoring Mechanism ◽  
The Impact

Financial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee’s effectiveness on the financial reporting quality among the Malaysian GLCs following the transformation program. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency of meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003-2009). As of 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data that resulted in the total number of firm-year observations to 120 for six years (years 2003-2009).  Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. Agency theory was applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. The study is important as it provides additional knowledge about the impact of audit committees effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committees effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession.     

scholarly journals The Impact of Audit Committee Performance and Composition on Financial Reporting Quality in Jordan

2021 ◽  
Vol 12 (3) ◽  
pp. 55
Author(s):  
Qasim Ahmad Alawaqleh ◽  
Nashat Almasri
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Work Performance ◽  
Stock Exchange ◽  
Internal Audit ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Governance System ◽  
The Impact

The corporate governance literature indicates efforts to investigate the role of the audit committee (AC) in improving the financial reporting quality (FRQ) after the emergence of financial scandals in many countries in the world, inclusive Jordan. To date, empirical findings are inconclusive enough to address all audit committee characteristics regarding its competency and responsibilities by employing a questionnaire to collect data about this relationship. Thus, this study measures the correlation between AC (performance and composition) and FRQ of manufacturing corporations registered on the Amman Stock Exchange (ASE). To test this impact empirically, the target population was financial managers, audit committee members, and internal audit managers who are working in manufacturing corporations listed on the (ASE). According to the coefficient (β), the independent variables (Audit Committee Performance and Audit Committee Composition influence the dependent variable FRQ. This research recommends that firms enhance the audit committee work performance and composition to ensure audit committee members effectively enhance the FRQ audit committee is a vital mechanism of the firm's corporate governance system.

scholarly journals The effect of audit committee role and sharia supervisory board role on financial reporting quality at Islamic banks in Indonesia

2014 ◽  
Vol 17 (1) ◽  
pp. 145
Author(s):  
Rini Rini
Keyword(s):  
New Product Development ◽  
Financial Reporting ◽  
Internal Control ◽  
Audit Committee ◽  
Supervisory Board ◽  
Reporting Quality ◽  
Two Dimensions ◽  
Financial Reporting Quality ◽  
Islamic Banks ◽  
Internal Auditor

This research examines the effect of audit committee role and sharia supervisory board role on financial reporting quality. The data is provided from 33 Islamic banks in Indonesia that were taken by questionnaire from 173 employees (head of group, head of division, and internal auditor), audit committee members, and sharia supervisory board members. The questionnaire consisted of 51 questions. Research instrument contains 15 questions about audit committee role, with two dimensions (role related financial reporting quality and role related internal control); 12 questions about sharia supervisory board role, with two dimensions (control over process of new product development and control over bank activity); and 24 questions on financial reporting quality, with eight dimensions (timeliness, verifiability, completeness, representation faithfulness, neutrality, comparability, consistency and clarity). Data analysis used multiple regressions. The result of this research showed that audit committee role and sharia supervisory board role influenced financial reporting quality simultaneously and partially.

scholarly journals Impact of corporate governance mechanisms on financial reporting quality: a study of Indian GAAP and Indian Accounting Standards

2020 ◽  
Vol 18 (4) ◽  
pp. 1-13
Author(s):  
Faozi A. Almaqtari ◽  
Abdulwahid Abdullah Hashed ◽  
Mohd Shamim ◽  
Waleed M. Al-ahdal
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Impact

The present study examines the impact of corporate governance mechanisms on financial reporting quality under Indian GAAP and Indian Accounting Standards (Ind. AS). A sample of 97 companies listed on the Bombay Stock Exchange is selected. Corporate governance mechanisms have been considered as independent variables, and financial reporting quality is the dependent variable. Corporate governance is measured by board effectiveness (board size, independence, diligence, and expertise), audit committee attributes (size, independence, diligence, and expertise), foreign ownership, and audit quality. Descriptive statistics, correlation, and OLS regression are conducted to estimate the results. The study results reveal that board characteristics and audit committee attributes, except for audit committee diligence, have a significant effect on financial reporting quality. However, the impact of board diligence and audit committee attributes is negative. Foreign ownership has no contribution to financial reporting quality, but audit quality has a significant effect. The findings of the study have considerable implications for regulators, policymakers, managers, investors, analysts, and academicians. More emphasis should be given to compliance with Ind. AS, and an oversight body for compliance with Ind. AS should be established. AcknowledgmentThis publication was supported by Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.

Boardroom Backscratching and Audit Fees

2018 ◽  
Vol 38 (2) ◽  
pp. 179-206 ◽  
Author(s):  
Dean Hanlon ◽  
Mehdi Khedmati ◽  
Edwin KiaYang Lim
Keyword(s):  
Financial Reporting ◽  
Policy Development ◽  
Audit Committee ◽  
Reporting Quality ◽  
Audit Fees ◽  
Financial Reporting Quality ◽  
Risk Premiums ◽  
Audit Opinion ◽  
Future Performance ◽  
The Impact

SUMMARY This study investigates the impact of backscratching between the CEO and directors on a firm's future performance, financial reporting quality, and audit fees. We find that the presence and extent of boardroom backscratching are associated with weaker future performance, poorer quality financial reporting, and higher audit fees. We attribute these findings to backscratching firms' increased business and information risks inducing auditors to exert greater effort and charge risk premiums in response to heightened audit engagement risks. We observe consistent results when extending our investigation to backscratching between the CEO and audit committee and between the CEO and the CFO, given that the audit committee and the CFO influence financial reporting quality. Finally, we provide evidence that backscratching firms display greater audit report lag and a higher likelihood of receiving a going concern audit opinion. Our study offers insights to regulators concerning policy development to strengthen board effectiveness and remuneration disclosures.

scholarly journals Does Audit Committee Reduce Earnings Management in Banks? Evidence from Tunisian Context

2019 ◽  
Vol 15 (8) ◽  
pp. 86
Author(s):  
Amina Zgarni ◽  
Hassouna Fedhila
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Commercial Banks ◽  
Audit Committee ◽  
Reporting Quality ◽  
Financial Information ◽  
Financial Reporting Quality ◽  
Public Authorities ◽  
Business World ◽  
The Impact

In the business world, financial information disseminated by companies reveals an undeniable importance, and this is an unavoidable necessity for any decision- making of the various stakeholders (investors, lenders, customers, employees, public authorities, etc.). This study aims to determine the nature of the impact of the introduction of an audit committee on the financial reporting quality, in particular the earnings management, in the banking context. Through the static panel method and a sample of all Tunisian commercial banks, over a period from 2001 to 2014, the study shows, surprisingly, that the audit committee is a catalyst for earnings management.

scholarly journals Financial Reporting Quality on Indonesia Islamic Banks: An Internal Stakeholders Perception

2015 ◽  
Vol 2 (1) ◽  
pp. 015 ◽  
Author(s):  
R. Rini
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Supervisory Board ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Islamic Banks ◽  
Internal Auditor ◽  
Interpretive Analysis ◽  
Internal Stakeholders

This study describes financial reporting quality of 33 Islamic Banks in Indonesia. The data was taken by questionnaires from 173 respondents, consist of employees (head of group, head of division, and internal auditor), audit committee members, and sharia supervisory board members. The questionnaires consist of 24 questions with eight dimensions of research instruments, they are financial reporting quality (ie. timeliness, verifiability, completeness, representation faithfulness, neutrality, comparability, consistency and clarity). This research is qualitative, therefore using interpretive analysis as data analysis. The result shows that representative faithfulness is considered as the most important component by internal party of Islamic banks.

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