The effect of audit committee shareholding, financial expertise and size on interim financial disclosures.
Publication date
2005Keyword
Audit committeesFinancial statements
Interim
Corporate veil
Corporate governance
Corporations -- Auditing
Financial disclosure
Accounting
Stockholdeers
Peer-Reviewed
YesOpen Access status
closedAccess
Metadata
Show full item recordAbstract
In recent years, corporate failures and accounting irregularities have led to concerns about the effectiveness of audit committees in the financial reporting process. In response, corporate governance committees in different countries have made specific recommendations designed to enhance the role of the audit committee in executing its financial reporting oversight duties. We investigate in this study, the effect of some of the recommendations by empirically examining the relationship between selected audit committee characteristics and the level of disclosure in interim reports of a sample of 262 UK listed companies. Specifically, the audit committee characteristics examined are shareholding of audit committee members (as a proxy for audit committee independence), audit committee size and audit committee financial expertise. Employing both a weighted and unweighted index to measure interim disclosure, the results indicate a significant negative association between shareholding of audit committee members and interim disclosure. Our results provide evidence of a significant positive association between interim disclosure and audit committee financial expertise. We find no significant relationship between audit committee size and the extent of disclosure in interim reports. Overall, however, our results suggest that audit committee characteristics have an impact on its monitoring effectiveness of the financial reporting process. These results have important implications for corporate governance policy-makers who have a responsibility to prescribe appropriate corporate governance structures to ensure that shareholders are protectedVersion
No full-text in the repositoryCitation
Mangena, M. and Pike, R.H. (2005). The effect of audit committee shareholding, financial expertise and size on interim financial disclosures. Accounting and Business Research. Vol. 35, No. 4, pp. 327-349.Link to Version of Record
https://doi.org/10.1080/00014788.2005.9729998Type
Articleae974a485f413a2113503eed53cd6c53
https://doi.org/10.1080/00014788.2005.9729998