scholarly journals AUDIT COMMITTEE ATTRIBUTES AND AUDITOR BRAND NAME OF LISTED COMPANIES IN NIGERIA

2019 ◽  
Author(s):  
Hussaini Bala ◽  
Noor Afza Amran ◽  
Hasnah Shaari
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Committee Member ◽  
Gender Diversity ◽  
Reporting Quality ◽  
Annual Reports ◽  
Stock Ownership ◽  
Brand Name ◽  
Legal Expert

This paper examines the effect of audit committee attributes on auditor brand name proxy by the Big 4. The study utilizes 88 listed firms in Nigeria through 440 firm-year observations ranging between the years 2012 to 2016. The data for the study were extracted from the firms’ annual reports and Thompson Reuters DataStream. A panel logistic regression was employed to estimate the model of the study. Consistent with complementary hypothesis the findings demonstrate that audit committee attributes (audit committee independence, audit committee financial accounting experts, audit committee legal expert, female audit committee member and audit committee stock ownership) are positively related to auditor brand name. The findings also support the substitution hypothesis perspectives by revealing an inverse relationship between audit committee meetings, audit committee tenure, audit committee chair and auditor brand name. Our findings offer an initial insight on the effect of audit committee legal expert, and audit committee stock ownership on auditor brand name. Thus, the findings can benefit existing and prospective shareholders who are the direct users of financial reports. This study can also help policy-makers and regulators by allowing them to better recognize the importance of these distinctive audit committee attributes in enhancing the quality of audits, which is one of the most vital elements of improving financial reporting quality. Keywords:Audit committee, Audit quality, Audit size, Gender diversity, Ownership

Influence of internal audit reporting line and implementing internal audit recommendations on financial reporting quality

2019 ◽  
Vol 28 (1) ◽  
pp. 26-50 ◽  
Author(s):  
Abdulaziz Alzeban
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Negative Impact ◽  
Empirical Work ◽  
Internal Audit ◽  
Reporting Quality ◽  
Positive Influence ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Content Type

Purpose This study aims to explore the influence of internal audit (IA) reporting lines and the implementation of IA recommendations (IMPLEMENT) on financial reporting quality (FRQ). Design/methodology/approach Data were obtained from the annual reports of 201 UK listed companies, and also from survey questionnaires completed by the chief audit executives working within those companies. Two measures are used as proxies of FRQ: abnormal accruals and accrual quality. Findings Findings indicate that when IA reports directly to the audit committee (AC), there is a significant positive influence upon FRQ. Conversely, when IA reports to the chief executive officer (CEO) or chief financial officer (CFO), there is a negative impact on FRQ. It is further shown by the results that lower income-increasing accruals are evident when there is greater IMPLEMENT, thereby showing an accompanying positive influence on FRQ. Moreover, the results indicate that greater adoption of such recommendations is also associated with internal reporting lines, i.e. when IA reports directly to the AC, FRQ results improved. Originality/value These findings contribute to the literature in the field of IA reporting, by introducing new insights regarding reporting lines and IMPLEMENT, and the influence of these on FRQ, and by establishing those insights through empirical work undertaken in the UK where little research on this issue has been reported.

scholarly journals Audit Committee Accounting Expertise, Analyst Following, and Market Liquidity

2016 ◽  
Vol 33 (2) ◽  
pp. 174-199 ◽  
Author(s):  
David B. Farber ◽  
Shawn X. Huang ◽  
Elaine Mauldin
Keyword(s):  
Financial Reporting ◽  
Trading Volume ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Earnings Forecasts ◽  
Market Liquidity ◽  
Management Earnings Forecasts ◽  
Analyst Following ◽  
Accounting Expertise

We study the relation between audit committee accounting expertise, analyst following, and market liquidity. Our main results indicate that analyst following increases subsequent to the appointment of an accounting expert to the audit committee. We also provide evidence that accrual quality, as opposed to audit quality or management earnings forecasts, is the channel through which accounting expertise increases analyst following and improves analyst forecast properties. We also show that audit committee accounting expertise is related to higher trading volume and lower liquidity risk, supporting incentives for greater analyst following. Our study extends prior literature by providing evidence that audit committee accounting expertise enhances firms’ information environment beyond the effects it has on financial reporting quality or analysts’ forecast properties. Our study also complements the literature on determinants of analyst following and market liquidity, both of which are related to cost of capital. Results from our study should be useful to firms seeking to enhance analyst following and market liquidity.

scholarly journals AN INVESTIGATION ON THE EFFECT OF AUDIT COMMITTEE ON FINANCIAL REPORTING QUALITY IN PRE AND POST IFRS ADOPTION: EVIDENCE FROM MALAYSIAN COMPANIES

2020 ◽  
Vol 8 (2) ◽  
pp. 25-35
Author(s):  
Citrawati Jatiningrum ◽  
Fauzi ◽  
Rita Irviani ◽  
Mujiyati ◽  
Shahanif Hasan
Keyword(s):  
Earnings Management ◽  
Empirical Evidence ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Ifrs Adoption ◽  
Significant Difference ◽  
The Relationship

Purpose of study: This study sought to investigate the effect of the audit committee on Financial Reporting Quality (FRQ), explicitly focuses on the period pre- and post-mandatory IFRS adoption in Malaysia. The Financial Reporting Quality in this study proxied by earnings management. Malaysian. Methodology: The sample study has covered 81 listed companies on Bursa Malaysia, with 567 observations, which examined the time of 2009 to 2015. The relationship was analyzed by statistical multiple regression linear methods and also examined the significance of differences between pre and post IFRS adoption by paired sample t-test. Result: The main finding reveals that the relationship between the audit committee and financial reporting quality after IFRS adoption in Malaysia has more significant. However, empirical evidence showed that the post period of mandatory IFRS evidently no significant difference level of earnings management practice. This result indicates that the IFRS adoption cannot reduce managerial discretion yet and the possibility for EM manipulation for Malaysian companies. Implication/Application: This finding has critical implications for regulators and policymakers, that the consequences of IFRS adoption do not increase the quality of financial reporting when EM practices still continue in the different forms. Novelty/Originality of this study: This study gives empirical evidence that there are differences in relationship level between audit quality and earnings management in the period before and after IFRS mandatory adoption in Malaysia companies.

Audit committee and financial reporting quality: the moderating effect of audit quality

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sana Mardessi
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Moderating Effect ◽  
Real Earnings Management ◽  
Financial Reporting Quality ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this study is to address the impact of audit quality on financial reporting quality proxied by real earnings management. To further clarify the mentioned links, this study empirically assesses the moderating effect of audit quality. Design/methodology/approach The study is based on a sample consisting of 90 non-financial companies that are listed in the Amsterdam stock exchange in AEX all share index over the 2010–2017 period. This study applies a quantitative approach and secondary data as the main source of information for analysis. This paper performs an ordinary least squares regression to examine the moderating effect of audit quality on the relationship between financial reporting quality. Findings Empirical findings demonstrate that corporate governance mechanism, mainly independence members, financial expert and audit committee size has a statistically significant relationship with real earnings management. However, the effect of audit committee meetings on real earnings management is not significant. There is also evidence that audit quality moderates the audit committee – real earnings management links. Originality/value This study extends the existing literature by examining the moderating effect of audit quality on the relationship between financial reporting quality proxied by real earnings management in the Dutch context.

Earnings management: do attendance and changes of audit committee members matter?

2018 ◽  
Vol 33 (8/9) ◽  
pp. 760-778 ◽  
Author(s):  
Murad Abdulsalam Qamhan ◽  
Mohd Hassan Che Haat ◽  
Hafiza Aishah Hashim ◽  
Zalailah Salleh
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Fixed Effects ◽  
Audit Committee ◽  
Reporting Quality ◽  
Securities Market ◽  
Annual Reports ◽  
Fixed Effects Model ◽  
Content Type ◽  
New Evidence

Purpose This paper aims to examine the association between new audit committee characteristics – attendance of audit committee members at meetings and changes of members through the demission or appointment of members of the audit committee during the year – and earnings management. Its objective is to contribute new evidence that extends studies on audit committee characteristics in reducing earnings management. Design/methodology/approach The sample comprises 370 observations obtained from the annual reports of 74 companies listed on the Muscat Securities Market for the years 2008-2012. The panel data are analysed using a fixed effects model to validate the hypotheses and model. Findings This study finds a negative association between earnings management and members’ attendance at the audit committee meetings. Additionally, there is a positive significant relationship between earnings management and changes to members through demission or appointment. Originality/value This study broadens the scope of audit committee characteristics by providing empirical evidence of the relationship between new audit committee characteristics and earnings management and may assist policymakers and regulators in determining ways to enhance audit committee characteristics and improve financial reporting quality.

scholarly journals Corporate Governance and Financial Reporting Quality in Selected Nigerian Company

2014 ◽  
Vol 2 (3) ◽  
pp. 7-16
Author(s):  
Onuorah Anastasia Chi-Chi (PhD) ◽  
Imene Oghenefegha Friday
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Discretionary Accruals ◽  
Financial Reporting Quality ◽  
Board Structure ◽  
Quality Audit

This paper evaluated the level of performance of some selected companies ranging from commodities, brewery, banking, oil and gas and beverages in terms of corporate governance measure indictors on the firm quality of financial reporting in Nigeria. The data were collected from 2006 to 2015. Econometric analysis were conducted and the result suggests that the correlation among corporate governance indicators of board structure (size-BRDSZ and independence-BRDID), audit quality (audit committee size (ADCMZ), the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4), board experience (i.e. experience-BRDEX) and financial reporting quality is 93.47%. The independent variables can explain the variation in the FRQDA by 54.29%. There is overall significance among the parameters measuring financial reporting quality as discretionary accruals of firm (FRQDA). Board structure (size-BRDSZ), board experience (experience-BRDEX) and the quality of external audit (EADTQ) have positive impact on the financial reporting quality measured by the discretionary accruals of firm (FRQDA) by 16.01, 0.05 and 2.75. However, independent directors on the board of firm (independence-BRDID) and audit quality (audit committee size (ADCMZ) negatively affect financial reporting quality measured by the discretionary accruals of firm (FRQDA) as much as 0.99 and 20.01. Guarantee Trust Bank Plc. among the five selected companies of study in Nigeria has better performance of financial reporting based on board structure (size-BRDSZ) and audit committee size (ADCMZ). This revealed that there is short run relationship among Audit quality (audit committee size (ADCMZ), and the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4) and board experience (i.e. experience-BRDEX) have not granger cause FRQDA. It further recommended that greater focus on corporate governance indicators so as to bring about global standard financial reporting in the Nigerian emerging market for investment opportunity.

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

2020 ◽  
pp. 1-14
Author(s):  
Abdulrasaq Mustapha ◽  
Abdulrauf O. Isiaka ◽  
Kudirat A. Babatunde
Keyword(s):  
Audit Committee ◽  
Banking Sector ◽  
Audit Quality ◽  
Random Effect ◽  
Gender Diversity ◽  
Audit Committees ◽  
Annual Reports ◽  
P Value ◽  
Ex Post ◽  
Audit Fee

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.

scholarly journals Editorial note

2018 ◽  
Vol 15 (2) ◽  
pp. 4-4
Author(s):  
Alexander Kostyuk
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Gender Diversity ◽  
Reporting Quality ◽  
Fair Value ◽  
Accounting Conservatism ◽  
Editorial Note ◽  
Earning Quality ◽  
Corporate Social ◽  
And Control

The recent issue of the journal Corporate Ownership and Control is devoted to the issues of audit quality, R&D intensity, corporate governance, block ownership, gender diversity, firm performance, glass cliff, ownership structure, family-owned businesses, fair value accounting, earning management, earning quality, cyber risks, corporate social responsibility (CSR), financial reporting quality, IFRS, accounting conservatism, board independence, etc.

scholarly journals The effect of audit committee characteristics on financial reporting quality: The moderating role of audit quality in the Netherlands

2021 ◽  
Vol 18 (3) ◽  
pp. 19-30 ◽  
Author(s):  
Sana Mardessi Masmoudi
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Ordinary Least Squares ◽  
Real Earnings Management ◽  
Financial Reporting Quality ◽  
Moderating Role

The purposes of this study are to shed light, on the one hand, on the effect of audit committee characteristics, namely independent members in audit committee, a financial expert in audit committee, frequency of meetings and audit committee size on financial reporting quality proxied by real earnings management. On the other hand, it aims to investigate the moderating role of audit quality in the relationship between audit committee characteristics and financial reporting quality. The objective is to contribute to the new evidence on the role of audit committee characteristics towards the financial reporting quality with audit quality as a moderator, particularly the appointment of Big 4 company. This study uses the ordinary least squares (OLS) regression to achieve the research purpose by evaluating the data collected from 90 public listed companies from 2010 to 2019 in the Dutch context. The results state that audit committee characteristics have a statistically significant relationship with real earnings management. However, the effect of audit committee meetings on abnormal operating cash flow and discretionary expenses is not significant. There is also evidence that audit quality positively moderates the audit committee and real earnings management links. Lastly, the findings of this study will help professional accountancy bodies and governments to highlight the relevance of earnings management in safeguarding trustworthy financial information, owners’ wealth and to enhance audit committee characteristics in improving audit quality, especially after the enforcement of the Dutch Corporate Governance Code in 2016.

scholarly journals Audit Committee Financial Expertise and Financial Reporting Timeliness in Emerging Market: Does Audit Committee Chair Matter?

2018 ◽  
Vol 10 (4) ◽  
pp. 63
Author(s):  
Saeed Rabea Baatwah ◽  
Norsiah Ahmad ◽  
Zalailah Salleh
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Emerging Market ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Committee Chair ◽  
Financial Expertise ◽  
Accounting Expertise

This study examines whether audit committee chair with financial expertise enhances the audit committee role in financial reporting quality in emerging market. We investigate this influence by employing the direct effect and moderating effect of audit committee chair with financial expertise on financial reporting timeliness. By using Omani data and the panel data method for two proxies for financial reporting timeliness, we find that audit committee chair with financial expertise enhances the timeliness of financial reporting through making the disclosure of annual reports timely. Further, we report evidence showing that both accounting and nonaccounting financial expertise on the audit committee have a positive and significant influence on the timeliness of financial reporting. We also document that the association between financial expertise and the timeliness of financial reporting is more pronounced when the chair of the audit committee has accounting expertise. This study is among the comprehensive evidence prove that audit committee chair with accounting expertise contributes to the quality of financial reporting in emerging market.

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