For several decades, the Audit Committee (AC) has been a subject of substantial research interest in developed countries including the U.S.A. and the U.K. However, this still remains a relative new topic in developing countries. In an attempt to examine the scenario of AC practices from the perspective of an emerging economy like Bangladesh, this study investigates the state of AC practices in the companies listed on the Dhaka Stock Exchange (DSE). This study was undertaken through a questionnaire survey and an interview survey in order to collect the data. The respondents of these surveys consisted of four sample groups, namely: the AC Chairperson, the Company Secretary, the Head of Finance, and the External Auditor. The objective of the interviews was to complement the findings of the questionnaire survey by obtaining a greater insight into the issue. The findings of the study indicate that the overall effectiveness of ACs in Bangladesh is not at a satisfactory level. More specifically, the observations made in the study include: (i) the ACs are mostly dominated by executive directors; (ii) the expertise (in terms of qualification and experience) of AC members is not at a satisfactory level; (iii) the AC members do not devote much time to the committee’s affairs; (iv) the independent members of the committee are not adequately remunerated for the time and effort devoted to the company; and, (v) although the ACs are playing an important role in some areas including financial reporting, external auditing and internal auditing, there is still plenty of scope where the ACs can play a more proactive role. The study also found that the opinions of three sample groups namely, the AC Chairperson, the Company Secretary and the Finance Head were similar in most of the aspects of AC practices while the External Auditor group differed from the other three groups in some areas. Furthermore, the current study identified areas that need improvement in order to obtain more effective services from the ACs in Bangladesh. These include: (i) lack of qualification of the AC members; (ii) lack of experience of the AC members; (iii) majority of executive members in the ACs; and, (iv) lack of diligence of the AC members. The measures that can be taken to improve the effectiveness of ACs in Bangladesh include issues such as: (i) introducing new rules in relation to AC composition (in terms of minimum qualification and experience of AC members, and the number of independent members); (ii) enhancing the monitoring of compliance with the existing rules in relation to AC practices (instead of leaving them on a ‘comply or explain’ basis); and (iii) strengthening the internal audit functions of the company.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:567258 |
| Date | January 2012 |
| Creators | Mohiuddin, Md |
| Publisher | Cardiff University |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://orca.cf.ac.uk/18764/ |
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