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Factors affecting independent audit committee members' effectiveness - the case of listed firms on Bursa Malaysia


Citation

Mohd Saat, Nur Ashikin and Karbhari, Yusuf and Xiao, Jason Zezhong and Heravi, Saed (2012) Factors affecting independent audit committee members' effectiveness - the case of listed firms on Bursa Malaysia. World Review of Business Research, 2 (3). pp. 132-147. ISSN 1838-3955; ESSN: 1839-1176

Abstract

Studies on audit committee effectiveness have so far examined the relationship between significant presence of independent directors and the establishment of influential independent standpoint on the committee’s decision-making. However, independent composition does not necessarily guarantee audit committee members performance of financial oversight duties competently. This paper aims to investigate the characteristics of audit committee members in 221 listed firms in Bursa Malaysia. The results show that audit committee governing enhanced firm performance when there is high proportion of independent audit committee members with practicing accountant experience on the committee and firm explicitly disclosed the right of audit committee to report to the Stock Exchange of its breaching of Exchange and other regulatory rules. On the contrary, the relationship between composition of audit committee exclusively by independent director and the convening of independent committee members meeting with the external auditor without executive officers presence and firm performance is negative. The audit committee effectiveness is crucially dependent on audit committee members collective commitment to fulfil their oversight duties responsibly and management giving full co-operation and support to the access of required information for decision-making.


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Official URL or Download Paper: http://www.wrbrpapers.com/previous_issue/May/2012

Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Billion Brains
Keywords: Audit committee; Corporate governance; Firm performance
Depositing User: Nabilah Mustapa
Date Deposited: 06 Aug 2015 00:45
Last Modified: 31 Oct 2017 02:45
URI: http://psasir.upm.edu.my/id/eprint/22860
Statistic Details: View Download Statistic

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