The purpose of this research was to empirically examine the relationship between audit committees and the changing of independent accounting firms, especially those independent auditor changes in which accounting firms are displaced as auditors by accounting firms that are in the larger-sized category. This research involved the testing of two different, but closely related questions. The first research question asks, "Does the existence of an audit committee of a board of directors partially explain a company's decision to change independent accounting firms?" The second research question asks, "Does the existence of an audit committee of a board of directors partially explain a company's decision to change to a larger accounting firm rather than change to an accounting firm of equal or smaller size?" Statistical models were developed for the two research questions using criteria involved in the auditor change decisions as reported in previous research studies. Eight criterion, including the existence of an audit committee, were defined specifically and incorporated into a survey instrument. The survey instrument was circulated to the accounting firms in the Dallas-Fort Worth area. The accounting firms were asked to report certain information regarding their current and previous auditing clients. Data received from the firms were analyzed using multiple regression techniques .

The purpose of this research was to empirically examine the effect of the establishment of outside audit committees on the objectivity of the management results-reporting practices of those companies that established such committees in response to the New York Stock Exchange mandate effective June 30, 1978. Management income smoothing behavior is taken as a measurable surrogate for the objectivity of the management results-reporting practices. This research involved the testing of one research problem. The research question asks, "Will the establishment of outside audit committees by companies that had no such committees prior to the New York Stock Exchange mandate effective June 30, 1978, be associated with a decrease in the degree of smoothing in the net income series for the period after that date relative to the degree of smoothing prior to that date?" The answer to this question required the selection of an experimental and a control group. Each group was composed of fifty New York Stock Exchange listed firms. Linear and semi-log regression models were used to measure each firm's degree of income smoothing (defined as reducing the variability of a net income series about its trend line). The change in mean square errors of the experimental and control groups was compared using the chisquare and median tests. Neither the chi-square or the median test found a statistically significant increase in the objectivity of the management results-reporting function for the firms that established outside audit committees in response to the NYSE mandate effective June 30, 1978.

The thesis explores the relationship between Audit Committees and External Auditors’ fees of a sample of FTSE 350 companies in the UK for the period of 2005-2006. This is achieved by providing answers to three main research questions. First, what are the determinants of Audit Committee activity? Second, what is the relationship between Audit Committee activity and external auditors’ fees? Third, what is the relationship between audit and non-audit fees and how does the Audit Committee affect these? Starting out with an Agency Theoretical background, the study found evidence consistent with the views that a higher proportion of Independent Non-Executive Directors on the board enhances Audit Committees’ activity, but the presence of financial expertise on the committee was not found to be statistically significant in explaining its activity. The thesis also documented evidence that shows that Audit Committee activity is inversely related to managerial ownership of shares in companies. In line with the economic theory of auditing, the researcher used fees paid to the external auditor to proxy for the level of economic bonding between auditors and their clients. Higher fees are interpreted to indicate compromised independence. Five alternative measures of economic bonding were used. The researcher found a stable and statistically significant positive relationship between measures of economic bonding and Audit Committee activity. This finding is consistent with the view that Audit Committees buy more services from the auditors in order to enhance auditing and reporting quality. Strong positive relationships between audit and non-audit services and vice versa were found using a single equation fees model but these relationships were not consistent when the researcher controlled for endogeneity between audit and non audit fees using Simultaneous Equation Models (SEM). Audit Committee activity was not statistically important in these relationships. This evidence taken together supports the proposition that economies of scope exist in the joint provision of both audit and non-auditing services to the same client. Finally the thesis also documents evidence that suggests that knowledge spill-over flows from non-audit services to auditing services and that auditor do not use audit as a loss leader.

No description available.

D.Comm. / Accurate, credible and reliable financial reporting is critical for the effective functioning of the world’s capital markets and the protection of the interests of stakeholders, who rely on such information for their decision making. All the well- known corporate collapses of the 21st century have in common fraudulent financial reporting, unscrupulous management practices and the fact that they all had audit committees consisting of well-known and respected people. This state of events highlighted the fact that audit committees should not merely exist as window-dressing, but should be effective in their functioning. Audit committees will thus only be of value if they are properly constituted, are functioning effectively and if their role is clearly understood by all the parties concerned. This study’s research problem was to analyse the effective functioning of audit committees in the modern business environment, and the study aimed to investigate the factors and events that impact on the development, status and effective functioning of audit committees at large listed companies in South Africa. This was done through a comprehensive literature study of the factors impacting on audit committees and the empirical testing thereof at the largest listed companies in South Africa. The study found that audit committees are well established, properly constituted, have the authority and resources to effectively discharge their responsibilities and consist of members who act independently and who have the right mix of appropriate experience, financial literacy and financial expertise amongst their members. The audit committee’s role was found to be generally well understood and supported by the board and the Chief Financial Officers. It was further found that the audit committees are effective in discharging their oversight responsibilities on the board’s behalf, with the only real exception being their effectiveness regarding IT-related aspects. However, audit committee reporting in annual reports was found to be of a poor standard and did not reflect the iii actual workings and effectiveness of the committee. It was also found that the audit committee’s perceived responsibilities are evolving and that audit committee members’ legal liabilities are increasing. The research findings make a valuable contribution to the existing body of knowledge on current audit committee practices and developments. The study also outlines new responsibilities for future audit committees, as well as aspects that should be addressed in future legislation, regulations, corporate governance codes and best practice standards for audit committees.

Audit committee members play a pivotal role in the audit process, specifically, when negotiating disputes between management and the external auditor concerning audit adjustments. According to Auditing Standard 16 (formerly AU Section 380.34-.44), the external auditors are required to discuss, with the audit committee, all significant findings resulting from the completion of the audit including: (i) qualitative aspects of estimates; (ii) uncorrected misstatements; and (iii) disagreements with management (PCAOB 2015). Prior literature suggests an audit committee’s propensity to support the external auditor when dealing with the issues described above (Knapp 1987; DeZoort and Salterio 2001; DeZoort et al. 2003b; DeZoort et al. 2003a). However, these studies do not address how behavioral factors such as a relationship between the external auditors and audit committee members can affect a member’s stance on a proposed audit adjustment. The purpose of this study is to investigate the effect that the relationship between audit committee members and external auditors has on a member’s recommendation for proposed audit adjustments during a management dispute with the external auditor (i.e., whether they side with the external auditors or management). Specifically, this experiment examines the effects of relationships and the mediating effect of external auditor tenure on an audit committee member's judgments through the application of several social cognitive theories: (i) attachment theory; (ii) social judgment theory; (iii) and internal working models. Results indicate that external auditor/audit committee member relationships and auditor tenure significantly influence an audit committee member’s decision making when faced with an auditor/management dispute. Also, auditor tenure (long) does not negatively affect audit quality.

Published Article / This article discusses the developments and factors that impact on the external audit function, and analyses the role that an effectively functioning audit committee can play in supporting the external auditor's independence and effectiveness. This is done through a literature review of external audit and audit committee developments, and is supported by empirical evidence obtained from assessing the annual reports and from questionnaires sent to the audit committee chairs of the Top 40 listed companies in South Africa. The main findings of the study are that audit committees at the largest listed companies in South Africa are taking responsibility for overseeing the external audit function, but that the disclosure thereof in annual reports was found to be lacking. These findings are of significance as they provide support for the recommendations of King III (effective from 1 March 2010) that all companies should form audit committees and that external audit should be given oversight responsibilities in this regard.

Thesis (Ph.D.)--York University, 2003. Graduate Programme in Administration. / Typescript. Includes bibliographical references (180-193). Also available on the Internet. MODE OF ACCESS via web browser by entering the following URL: http://wwwlib.umi.com/cr/yorku/fullcit?pNQ99259

The corporate form that developed in the early 20th century created enormous pressure for corporate governance mechanisms to curb the power of corporate managers. Berle and Means, legal pluralists, warned about concentrating economic power in the hands of a small but powerful class of professional managers. They claimed this "new form of absolutism" required governmental oversight and viewed boards of directors as part of management, rather than monitors for shareholders. The Securities and Exchange Commission (SEC) proposed that corporations establish a special board committee, made up of "nonofficer members" in response to the McKesson & Robbins scandal of the late 1930s. My dissertation examines the evolution of the U.S. corporate audit committee through three specific time periods: (1) 1920-1954; (2) 1955-1986; and (3) 1987 to the passage of the Sarbanes-Oxley Act of 2002. My purpose is to determine if evolution of the audit committee throughout these periods has been a reform continually couched in symbolism or whether the audit committee concept has evolved into real reform, allowing proper corporate governance and mitigation of unchecked corporate power. My analysis is a traditional empirical analysis, relying on both primary and secondary sources to develop a coherent ordering of facts. I use narrative in a narrow sense as my historical methodology, examining patterns that emerge and interpreting facts to develop a clear understanding of demands for and uses of audit committees. I use a holistic approach in studying the data, using narrative to show how these patterns ensue from the historical data.

Sammanfattning Titel: Revisionskommittéers påverkan på hållbarhetsrapporters tillförlitlighet: En kvantitativ studie på 298 börsnoterade företag i en low-litigation kontext. Nivå: Examensarbete på grundnivå i ämnet företagsekonomi (kandidatexamen). Författare: Albin Eriksson, Philip Lindholm Handledare: Jan Svanberg Datum: 2022-05-31 Syfte: Förekomsten av hållbarhetsrapportering externt granskad av tredje part har, i tidigare studier tolkats som väsentligt hos större företag, eftersom de i dess intressenters ögon önskar framstå som tillförlitliga och legitima. Detta eftersom revisorer som granskar rapporteringen kännetecknas av ett oberoende gentemot verksamheten. Då tidigare studier endast utförts inom en institutionell kontext kännetecknad av hög risk för stämning vid felaktiga beslut blir det intressant att jämföra dessa resultat med en miljö där granskare har friare tyglar. Syftet med denna studie är därför att undersöka huruvida revisionskommittéers granskning av hållbarhetsrapporteringen påverkar dess tillförlitlighet i en annan institutionell kontext, nämligen en lägre litigationsnivå än hos den befintliga litteraturen inom ämnet.   Metod: Studien baseras på den positivistiska forskningsfilosofin med en hypotetisk-deduktiv ansats. Studien har en kvantitativ strategi där 298 börsnoterade företag ligger till grund för sekundärdata genererad från databasen Thomson Reuters Eikon. Vidare har datamaterialet bearbetats och analyserats i statistikprogrammet SPSS.     Resultat och slutsats: Studiens resultat påvisar ett positivt samband mellan revisionskommittéers förekomst och hållbarhetsrapporters tillförlitlighet. Vi finner även att finansiell expertis inom revisionskommittéer har ett positivt samband med hållbarhetsrapporters tillförlitlighet. Revisionskommittéernas oberoende inom studiens institutionella kontext indikeras ha ett negativt samband med hållbarhetsrapporters tillförlitlighet.   Examensarbetets bidrag: Studien bidrar till att fylla forskningsgapet för revisionskommittéernas påverkan på hållbarhetsrapporteringen inom en low-litigation kontext. Studien gynnar även litteraturen om sambandet mellan revisionskommittéers karaktärsdrag och hållbarhetsrapporters tillförlitlighet, samtidigt som den avser ligga till grund för framtida forskning. Resultatet bidrar med värdefull teoretisk information till den företagsekonomiska forskningen gällande sambandet mellan extern granskning och företagens legitimitet.    Förslag till fortsatt forskning: Förslag till framtida forskning är att utföra en liknande typ av studie i denna institutionella kontext där fler av revisionskommittéernas främsta karaktärsdrag tas i åtanke, eftersom det möjligtvis kan innebära en annorlunda påverkan på tillförlitligheten.   Nyckelord: SRA, hållbarhetsrapportering, revisionskommittéer och low-litigation / Abstract Title: Audit committee impact on the credibility of sustainability reporting: A quantitative study of 298 public companies in a low-litigation context. Level: Student thesis, final assignment for Bachelor Degree in Business Administration  Authors: Albin Eriksson, Philip Lindholm Supervisor: Jan Svanberg Date: 2022-05-31 Aim: The existence of externally assured sustainability reporting by a third party, have in previous studies been interpreted as essential by bigger companies since they, in their stakeholder’s eyes, wish to appear as reliable and legitimate. This because the auditors that review the reporting are characterized by an independence towards the company. Since previous studies have only been implemented within an institutional context characterized by greater risk in case of wrongdoings it becomes interesting to compare these results with an environment where auditors have more space to act. The purpose of this study is therefore to examine whether audit committees review of sustainability reporting affects its reliability in a different institutional context, namely a lower litigation level than in the subject's existing literature.   Method: The study is based on the positivist philosophy of research with a hypothetical-deductive approach. The study has a quantitative strategy where 298 listed companies are the basis for secondary data generated from the database Thomson Reuters Eikon. Furthermore, the data material has been processed and analyzed in the statistical program SPSS.    Result and Conclusions: The results of the study show a positive relationship between the audit committees external review and the reliability of sustainability reports. We also find that financial expertise within audit committees is positively related to the reliability of sustainability reports. The independence of the audit committees within the institutional context of the study is indicated to have a negative relationship with the reliability of sustainability reports.   Contribution of the thesis: The study fills the research gap for audit committees impact on sustainability reporting in a low-litigation context. The study also benefits the literature on the relationship between the characteristics of audit committees and the reliability of sustainability reports, at the same time as it intends to form the basis for future research. The results contribute valuable theoretical information to the business economics research regarding the connection between external review and the company’s legitimacy.   Suggestions for future research: Suggestions for further research are to carry out a similar type of study within this institutional context where several of the audit committees main characteristics are taken into account, as this may have a different impact on reliability.   Key words: SRA, sustainability reporting, audit committees and low-litigation