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Audit Committees (audit + committee)
Terms modified by Audit Committees Selected AbstractsAudit Committee, Board Characteristics, and Auditor Switch Decisions by Andersen's Clients,CONTEMPORARY ACCOUNTING RESEARCH, Issue 4 2007Ken Y. Chen First page of article [source] Auditor Opinion Shopping and the Audit Committee: An Analysis of Suspicious Auditor SwitchesINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2001Deborah Archambeault This study examines whether audit committee effectiveness characteristics are related to suspicious auditor switching. Using the agency and audit committee literature, we hypothesize that audit committee existence, the proportion of independent directors, member experience in accounting, auditing, and finance, number of committee meetings, and number of committee members should be inversely related to suspicious auditor switching. A sample of 60 matched U.S. firms was evaluated along the hypothesized dimensions after controlling for company size, industry, stock exchange, financial health, and management stock ownership. Collectively, univariate and logistic regression results provide support for our predictions. The findings indicate that suspicious switchers: (1) are less likely to have an audit committee, (2) have a smaller percentage of independent directors on the audit committee, (3) have fewer members with experience in accounting, auditing, or finance, (4) hold fewer audit committee meetings, and (5) have smaller audit committees than nonsuspicious switching companies. Exploratory analyses also reveal that audit committees for companies with suspicious switches had younger members, and fewer members with no stock ownership in the company served. [source] Your Audit Committee: How to Cope with the End of the "Rubber Stamp" EraJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 4 2001Peter Woodlock Audit committee members at publicly traded firms now have to put their personal seal of approval on annual report financial statements. And this disclosure will appear over the printed name of each committee member. So don't expect your committee to "rubber stamp" top management's figures any more. They may even argue with you. But the way out is to give them confidence that your figures are indeed correct, improving committee oversight. The authors of this article supply a useful series of checklists that will help do that. © 2001 John Wiley & Sons, Inc. [source] Reclassification of unexplained stillbirths using clinical practice guidelinesAUSTRALIAN AND NEW ZEALAND JOURNAL OF OBSTETRICS AND GYNAECOLOGY, Issue 3 2009Elizabeth HEADLEY Background: Twenty-eight per cent of stillbirths in Australia remain unexplained. A clinical practice guideline (CPG) produced by the Perinatal Society of Australia and New Zealand (PSANZ) Perinatal Mortality Special Interest Group is in use to assist clinicians in the investigation and audit of perinatal deaths. Aims: To describe in a tertiary hospital using the PSANZ stillbirth investigation guidelines: (i) the distribution and classification of stillbirths, and (ii) the compliance with suggested stillbirth core investigations. Methods: Retrospective cohort of all stillbirths delivered between November 2005 and March 2008. Stillbirths were defined as no sign of life on delivery at , 20 weeks gestation or 400 g birthweight if gestation is unknown. Data were collected via the hospital Perinatal Mortality Audit Committee (PMAC). Cause of death was classified by the PSANZ Perinatal Death Classification. Results: There were 86 stillbirths (rate 7.2 per 1000 births). The percentage of unexplained stillbirths was 34% and 13% before and after CPG investigations, respectively. Unexplained stillbirths had the highest compliance with the recommended investigations. The initial cause of death documented on the death certificate was changed by the PMAC in 19 cases. The investigations most likely to prompt a change in the cause of death classification were autopsy and placental pathology. Conclusions: The percentage of unexplained stillbirths is lower than the national average in a hospital using the Perinatal Mortality Audit Guidelines. However, overall compliance is low, suggesting a targeted approach to investigation is used by clinicians despite a policy that aims to be non-selective. Autopsy and placental examination are the most useful investigations in assisting formal classification of cause of death. [source] The Association Between Accruals Quality and the Characteristics of Accounting Experts and Mix of Expertise on Audit Committees,CONTEMPORARY ACCOUNTING RESEARCH, Issue 3 2010DAN DHALIWAL First page of article [source] Auditor Independence in Canada: A Historical Perspective , From Shareholder Auditors to Modern-Day Audit Committees,ACCOUNTING PERSPECTIVES, Issue 1 2006DUNCAN L. GREEN ABSTRACT This paper uses the theoretical framework of Goldman and Barlev (1974) to examine auditor independence in Canada. It traces the historical development of the auditor's role in the 19th century and the beginning of the auditor's relationship with shareholders and management. It shows how, following the separation of management from shareholding, management's ability to influence auditors undermined auditor independence. The paper traces attempts by legislators and regulatory bodies to limit management's influence over auditors and to correct the asymmetry of their relationship. It notes that recent changes to legislation and rules of professional conduct are no longer proactive, but are reactions to corporate scandals in Canada and the United States. The paper argues that although future changes will occur to redress the imbalance, only structural changes are likely to provide a real solution to auditor independence problems. However, it is likely that such changes will be resisted by the accounting profession. [source] The Role and Functions of Audit Committees in the Indian Corporate Governance: Empirical FindingsINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2004Jawaher Al-Mudhaki This paper examines the composition, focus and functions of audit committees (ACs), the effects of meetings and the criteria used in the selection of members by Indian listed companies from 73 questionnaire responses. The survey was carried out during February,March, 2002. The study reveals that so far only 56.2% of companies have established an AC despite the fact that it is now mandatory. Of those companies which have ACs, 68.3% have between three and six members on ACs. However, only 14.6% of companies have independent non-executive directors on the committee, while 90.2% have non-executive directors. This shows a lack of independent representation on the committees. The functions of ACs are quite diverse and are classified in three areas: financial statements and reporting, audit planning, and internal control and evaluation. The review of annual audited financial statements, discussion and recommendations of audit fees and review of the effectiveness of internal control were rated very highly by the respondents. The review of note disclosure and scope of external audit work are other important functions performed by ACs. The most important areas for focus are compliance with the standards and regulatory bodies, probing material items and undisclosed liabilities. However, there are statistical differences between medium and large sized companies in the performance of their role. The main criteria used for membership of an AC are: experience and knowledge of business, experience of holding similar positions and accounting and finance expertise. Ownership in the company was not perceived as an important criterion. The majority of companies' AC meetings are held monthly or quarterly. MANOVA analysis reveals that the frequency of AC meetings has an effect on the internal control functions. The study concludes that the concept of an AC is not new in India but their formation is slow and their composition lacks independence. AC functions are still concentrated in the traditional areas of accounting and their role is not changing fast enough to make the corporate governance more effective. [source] The Association between Corporate Boards, Audit Committees, and Management Earnings Forecasts: An Empirical AnalysisJOURNAL OF ACCOUNTING RESEARCH, Issue 3 2005IRENE KARAMANOU ABSTRACT We study how corporate boards and audit committees are associated with voluntary financial disclosure practices, proxied here by management earnings forecasts. We find that in firms with more effective board and audit committee structures, managers are more likely to make or update an earnings forecast, and their forecast is less likely to be precise, it is more accurate, and it elicits a more favorable market response. Together, our empirical evidence is broadly consistent with the notion that effective corporate governance is associated with higher financial disclosure quality. [source] Audit committees and earnings qualityACCOUNTING & FINANCE, Issue 2 2009Peter Baxter G30; G38; M41 Abstract This research investigates whether audit committees are associated with improved earnings quality for a sample of Australian listed companies prior to the introduction of mandatory audit committee requirements in 2003. Two measures of earnings quality are used based on models first developed by Jones (1991) and Dechow and Dichev (2002). Our results indicate that formation of an audit committee reduces intentional earnings management but not accrual estimation errors. We also find differences in the associations between audit committee accounting expertise and the two earnings quality measures. Other audit committee characteristics examined are not significantly related to either earnings quality measure. [source] Audit Committee Independence and Disclosure: choice for financially distressed firmsCORPORATE GOVERNANCE, Issue 4 2003Joseph V. Carcello This study examines the relation between audit committee independence and disclosure choice for financially distressed US firms. The tenor of both the financial statement notes and Management Discussion and Analysis (MD&A) is considered. For firms experiencing financial distress, there is a significant positive relation between the percentage of affiliated directors on the audit committee and the optimism of the going-concern discussion in both the notes and the MD&A. These results add to the growing body of literature documenting a relation between audit committee independence and financial reporting quality. [source] Climate for Scandal: Corporate Environments that Contribute to Accounting FraudFINANCIAL REVIEW, Issue 1 2007Claire E. Crutchley G34; G38; K22 Abstract We examine the governance characteristics, earnings quality, growth rates, dividend policy, and compensation structure of 97 firms recently under investigation by the Securities and Exchange Commission (SEC) for accounting fraud. Our results show that the corporate environment most likely to lead to an accounting scandal manifests significant growth and accounting practices that are already pushing the envelope of earnings smoothing. Firms operating in this environment seem more likely to tip over the edge into fraud if there are fewer outsiders on the audit committee and outside directors appear overcommitted. [source] Innate and discretionary accruals quality and corporate governanceACCOUNTING & FINANCE, Issue 1 2010Pamela Kent M40; M41 Abstract This paper extends previous research on the association between corporate governance mechanisms and accruals quality. We derive measures of the discretionary and innate components of accruals quality and regress them against corporate governance characteristics. For discretionary accruals, we find use of a Big 4 audit firm and a larger audit committee as the primary governance mechanisms associated with higher accruals quality. For innate accruals quality, we find that higher quality is associated with an independent board of directors, a larger, more independent and more active audit committee, and use of a Big 4 audit firm. Our findings suggest a stronger relation between sound governance mechanisms and innate accruals quality than discretionary accruals quality. [source] Audit committees and earnings qualityACCOUNTING & FINANCE, Issue 2 2009Peter Baxter G30; G38; M41 Abstract This research investigates whether audit committees are associated with improved earnings quality for a sample of Australian listed companies prior to the introduction of mandatory audit committee requirements in 2003. Two measures of earnings quality are used based on models first developed by Jones (1991) and Dechow and Dichev (2002). Our results indicate that formation of an audit committee reduces intentional earnings management but not accrual estimation errors. We also find differences in the associations between audit committee accounting expertise and the two earnings quality measures. Other audit committee characteristics examined are not significantly related to either earnings quality measure. [source] Relation between external audit fees, audit committee characteristics and internal auditACCOUNTING & FINANCE, Issue 3 2006Jenny Goodwin-Stewart M42; G34 Abstract This study examines whether the existence of an audit committee, audit committee characteristics and the use of internal audit are associated with higher external audit fees. Higher audit fees imply increased audit testing and higher audit quality. We find that the existence of an audit committee, more frequent committee meetings and increased use of internal audit are related to higher audit fees. The expertise of audit committee members is associated with higher audit fees when meeting frequency and independence are low. These findings are consistent with an increased demand for higher quality auditing by audit committees, and by firms that make greater use of internal audit. [source] Audit committee composition and the use of an industry specialist audit firmACCOUNTING & FINANCE, Issue 2 2005Yi Meng Chen M41 Abstract Independent, competent boards of directors and audit committees are said to be important mechanisms of corporate governance. The purpose of the present study is to empirically examine the association between audit committee composition and audit quality. Specifically, the link between the proportion of non-executive directors on an audit committee, financial qualifications of directors and the number of audit committee meetings held in a year are investigated and expected to have a positive association with the quality of the audit firm used. Audit quality is proxied by industry specialization. The results support the link between a higher proportion of non-executive directors on an audit committee and use of an industry specialist audit firm. Other measures of audit committee quality (those with a higher proportion of directors with financial qualifications and those that meet more frequently) are not significantly associated with the use of an industry specialist audit firm. Sensitivity analysis shows that the presence of an audit committee is linked to use of an industry specialist audit firm. [source] Identifying Organizational Drivers of Internal Audit EffectivenessINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2009Marika Arena This study attempts to understand the organizational drivers of internal audit effectiveness in the light of recent changes in the ,mission' of internal auditing and its central role in corporate governance. On the basis of data from 153 Italian companies, our survey shows that the effectiveness of internal auditing is influenced by: (1) the characteristics of the internal audit team, (2) the audit processes and activities, and (3) the organizational links. Internal audit effectiveness increases in particular when the ratio between the number of internal auditors and employees grows, the Chief Audit Executive is affiliated to the Institute of Internal Auditors, the company adopts control risk self-assessment techniques, and the audit committee is involved in the activities of the internal auditors. [source] Two Factors Affecting Internal Audit Independence and Objectivity: Evidence from SingaporeINTERNATIONAL JOURNAL OF AUDITING, Issue 2 2001Jenny Goodwin This study examines two factors that may influence the independence and objectivity of internal audit. The first, affecting the organizational independence of the internal audit function, is its relationship with the audit committee. The second is the use of the function as a management training ground. It is argued that this practice might affect individual objectivity because internal auditors may be reluctant to withstand pressure from an auditee who could be their future supervisor. A survey of chief internal auditors in Singapore was undertaken to establish current practice in these areas and to identify relationships between these variables. A strong relationship between the audit committee and the internal audit function was found, with the level of interaction being greater when the audit committee was comprised solely of independent directors. The use of the internal audit function as a management training ground was also found to be quite widespread in Singapore. [source] Auditor Opinion Shopping and the Audit Committee: An Analysis of Suspicious Auditor SwitchesINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2001Deborah Archambeault This study examines whether audit committee effectiveness characteristics are related to suspicious auditor switching. Using the agency and audit committee literature, we hypothesize that audit committee existence, the proportion of independent directors, member experience in accounting, auditing, and finance, number of committee meetings, and number of committee members should be inversely related to suspicious auditor switching. A sample of 60 matched U.S. firms was evaluated along the hypothesized dimensions after controlling for company size, industry, stock exchange, financial health, and management stock ownership. Collectively, univariate and logistic regression results provide support for our predictions. The findings indicate that suspicious switchers: (1) are less likely to have an audit committee, (2) have a smaller percentage of independent directors on the audit committee, (3) have fewer members with experience in accounting, auditing, or finance, (4) hold fewer audit committee meetings, and (5) have smaller audit committees than nonsuspicious switching companies. Exploratory analyses also reveal that audit committees for companies with suspicious switches had younger members, and fewer members with no stock ownership in the company served. [source] The Role of Risk Management and Governance in Determining Audit DemandJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2006W. Robert Knechel Abstract:, Most prior research into audit fees has been based on a theoretical model which treats audit fees as the by-product of a production function ignoring potential demand forces that may drive the level of the audit fee. Inspired by prior ,anomalous' results, we take a different perspective by focusing on demand factors that may affect the level of the audit fee. Using data collected from a sample of listed companies in Belgium, we consider both disclosures about risk and risk management and actual decisions about corporate governance to examine whether audit fees are higher when these demand forces exist. In general, we expect that external auditing will increase in situations where there are multiple stakeholders with individual risk profiles who can shift some of the cost of monitoring to other stakeholders. Consistent with our theory and expectations, our results indicate that audit fees are higher when a company has an audit committee, discloses a relatively high level of financial risk management, and has a larger proportion of independent Board Members. Audit fees are lower when a company discloses a relatively high level of compliance risk management. The latter result indicates that controls are only complementary as long as they are voluntary, as mandated controls act as substitutes for non-mandated controls. [source] Spread of local anaesthetic solution in epidural space visualisation with ultrasound in single shot caudalsPEDIATRIC ANESTHESIA, Issue 6 2007K. Raghavan Background:, Ultrasonography is becoming an important adjunct in paediatric neuraxial blockade. Ultrasound guidance helps in visualisation of relevant neuraxial structures, predicting depth of epidural space from skin, reduction in bony contact and faster epidural placement. The visibility of neuraxial structures declines in patients as age increases. To date, there are no studies looking at the extent of spread of local anaesthetic solution in the epidural space and its correlation to the volume used, under ultrasound guidance. We report the results of our audit on spread of local anaesthetic solution in the epidural space in single shot caudal blocks. This abstract is based on the first 17 patients, the presentation will be based on all 50 patients. Methods:, This audit was approved by the local audit committee. We aimed to follow the extent of the spread of local anaesthetic within the epidural space with real time ultrasonography. Patients were selected when the planned anaesthetic included a single shot caudal block. The anaesthetists performing the anaesthetic and the caudal block consented to our ultrasound visualisation. All patients were below 5 years of age. No attempt was made to standardise the technique, the dose, or the speed of injection. After the placement of the caudal cannula by the primary anaesthetist involved in patient care, a separate anaesthetist, experienced in using ultrasound, visualised the neuraxial structures and subsequent spread of the local anaesthetic solution with real time ultrasound. The spread was followed during the injection and for 10 s after the completion of the injection. A 5 cm 7.5,12 MHz linear array was used longitudinally with either midline or paramedian approach. Results:, We are reporting the preliminary results from 17 patients. Patients were aged between 1 day and 1 year 10 months. They weighed between 3.3 kg and 14.6 kg. Either 22 gauge Jelco or Abbocath were used to perform the procedure; 0.25% or 0.20% L-bupivacaine was used on all occasions. The volume administered per kg ranged between 0.33 and 1.27 ml. The visibility of neuraxial structures was good on all occasions. On calculating the Spearmans correlation coefficient, the extent of spread of local anaesthetic in the epidural space was positively correlated with the volume used by a correlation coefficient of 0.64, with a P value of 0.008. The postoperative pain score in recovery was 0 in 16 out of the 17 cases. The one failure occurred when the observed spread would not have been expected to provide analgesia for the performed operation. Conclusions:, Among children below 5 years of age, there seems to be a positive correlation between the volume of local anaesthetic injected into the epidural space and the extent of its spread. This needs to be further investigated by a prospective randomised control trial. The utility of real time ultrasound to allow a reliable achievement of a desired level of sensory block, should be investigated i.e, whether the volume used in achieving a desired level of local anaesthetic spread, as guided by ultrasound, provides superior analgesia and fewer adverse effects compared with the volume calculated using the Armitage regimen. References, 1,Rapp HJ, Folger A, Grau T. Ultrasound guided epidural catheter insertion in children. Anesth Analg 2005; 101: 333,339. 2,Willschke H, Marhofer P, Bosenberg A, et al. Epidural catheter placement in children: comparing a novel approach using ultrasound guidance and a standard loss of resistance technique. Br J Anaesth 2006; 97: 200,207. 3,Marhofer P, Bosenberg A, Sitzwohl C et al. Pilot study of neuraxial imaging by ultrasound in infants and children. Pediatr Anesth 2005; 15: 671,676. [source] Factors Associated with the Development of Board Sub,committeesCORPORATE GOVERNANCE, Issue 1 2002Elizabeth Carson This study examines the factors associated with the presence of board sub,committees, specifically audit, remuneration and nomination committees. Factors which are hypothesised in this study to affect sub,committee presence are Big 6 auditors, non,executive directors, non,executive chairmen, number of intercorporate relationships of the board and shareholder type. Company size, number of board members and leverage are employed as control variables as suggested by earlier research. An analysis of board sub,committees in the Australian corporate environment is relevant to other jurisdictions as there are no mandatory requirements on either board composition or board sub,committees. There is, however, a mandatory requirement to disclose corporate governance practices which allows for a study of this type to be reliably conducted. A sample of 361 Australian companies drawn from the largest 500 public companies is employed. Audit committee presence is found to be positively associated with Big 6 auditors and the number of intercorporate relationships of the directors of the board. Remuneration committees are also found to be associated with Big 6 auditors and intercorporate relationships and also higher levels of institutional investment. The presence of nomination committees is not associated with auditors, directors or investors, but is associated with board size and leverage. The study concludes that audit committees are a highly developed and mature governance mechanism, and that remuneration committees can be classed as a developing and maturing structure whilst nomination committees are relatively immature. [source] Audit committees and earnings qualityACCOUNTING & FINANCE, Issue 2 2009Peter Baxter G30; G38; M41 Abstract This research investigates whether audit committees are associated with improved earnings quality for a sample of Australian listed companies prior to the introduction of mandatory audit committee requirements in 2003. Two measures of earnings quality are used based on models first developed by Jones (1991) and Dechow and Dichev (2002). Our results indicate that formation of an audit committee reduces intentional earnings management but not accrual estimation errors. We also find differences in the associations between audit committee accounting expertise and the two earnings quality measures. Other audit committee characteristics examined are not significantly related to either earnings quality measure. [source] Relation between external audit fees, audit committee characteristics and internal auditACCOUNTING & FINANCE, Issue 3 2006Jenny Goodwin-Stewart M42; G34 Abstract This study examines whether the existence of an audit committee, audit committee characteristics and the use of internal audit are associated with higher external audit fees. Higher audit fees imply increased audit testing and higher audit quality. We find that the existence of an audit committee, more frequent committee meetings and increased use of internal audit are related to higher audit fees. The expertise of audit committee members is associated with higher audit fees when meeting frequency and independence are low. These findings are consistent with an increased demand for higher quality auditing by audit committees, and by firms that make greater use of internal audit. [source] Audit committee composition and the use of an industry specialist audit firmACCOUNTING & FINANCE, Issue 2 2005Yi Meng Chen M41 Abstract Independent, competent boards of directors and audit committees are said to be important mechanisms of corporate governance. The purpose of the present study is to empirically examine the association between audit committee composition and audit quality. Specifically, the link between the proportion of non-executive directors on an audit committee, financial qualifications of directors and the number of audit committee meetings held in a year are investigated and expected to have a positive association with the quality of the audit firm used. Audit quality is proxied by industry specialization. The results support the link between a higher proportion of non-executive directors on an audit committee and use of an industry specialist audit firm. Other measures of audit committee quality (those with a higher proportion of directors with financial qualifications and those that meet more frequently) are not significantly associated with the use of an industry specialist audit firm. Sensitivity analysis shows that the presence of an audit committee is linked to use of an industry specialist audit firm. [source] The Role and Functions of Audit Committees in the Indian Corporate Governance: Empirical FindingsINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2004Jawaher Al-Mudhaki This paper examines the composition, focus and functions of audit committees (ACs), the effects of meetings and the criteria used in the selection of members by Indian listed companies from 73 questionnaire responses. The survey was carried out during February,March, 2002. The study reveals that so far only 56.2% of companies have established an AC despite the fact that it is now mandatory. Of those companies which have ACs, 68.3% have between three and six members on ACs. However, only 14.6% of companies have independent non-executive directors on the committee, while 90.2% have non-executive directors. This shows a lack of independent representation on the committees. The functions of ACs are quite diverse and are classified in three areas: financial statements and reporting, audit planning, and internal control and evaluation. The review of annual audited financial statements, discussion and recommendations of audit fees and review of the effectiveness of internal control were rated very highly by the respondents. The review of note disclosure and scope of external audit work are other important functions performed by ACs. The most important areas for focus are compliance with the standards and regulatory bodies, probing material items and undisclosed liabilities. However, there are statistical differences between medium and large sized companies in the performance of their role. The main criteria used for membership of an AC are: experience and knowledge of business, experience of holding similar positions and accounting and finance expertise. Ownership in the company was not perceived as an important criterion. The majority of companies' AC meetings are held monthly or quarterly. MANOVA analysis reveals that the frequency of AC meetings has an effect on the internal control functions. The study concludes that the concept of an AC is not new in India but their formation is slow and their composition lacks independence. AC functions are still concentrated in the traditional areas of accounting and their role is not changing fast enough to make the corporate governance more effective. [source] Auditor Opinion Shopping and the Audit Committee: An Analysis of Suspicious Auditor SwitchesINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2001Deborah Archambeault This study examines whether audit committee effectiveness characteristics are related to suspicious auditor switching. Using the agency and audit committee literature, we hypothesize that audit committee existence, the proportion of independent directors, member experience in accounting, auditing, and finance, number of committee meetings, and number of committee members should be inversely related to suspicious auditor switching. A sample of 60 matched U.S. firms was evaluated along the hypothesized dimensions after controlling for company size, industry, stock exchange, financial health, and management stock ownership. Collectively, univariate and logistic regression results provide support for our predictions. The findings indicate that suspicious switchers: (1) are less likely to have an audit committee, (2) have a smaller percentage of independent directors on the audit committee, (3) have fewer members with experience in accounting, auditing, or finance, (4) hold fewer audit committee meetings, and (5) have smaller audit committees than nonsuspicious switching companies. Exploratory analyses also reveal that audit committees for companies with suspicious switches had younger members, and fewer members with no stock ownership in the company served. [source] The Association between Corporate Boards, Audit Committees, and Management Earnings Forecasts: An Empirical AnalysisJOURNAL OF ACCOUNTING RESEARCH, Issue 3 2005IRENE KARAMANOU ABSTRACT We study how corporate boards and audit committees are associated with voluntary financial disclosure practices, proxied here by management earnings forecasts. We find that in firms with more effective board and audit committee structures, managers are more likely to make or update an earnings forecast, and their forecast is less likely to be precise, it is more accurate, and it elicits a more favorable market response. Together, our empirical evidence is broadly consistent with the notion that effective corporate governance is associated with higher financial disclosure quality. [source] Highly Valued Equity and Discretionary AccrualsJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2010Robert E. Houmes Abstract:, Overvalued equity provides a strong incentive for managers to report earnings that do not disappoint the market ( Jensen, 2005). We find that this can be extended to highly valued equity more generally. In the year following the classification as highly valued and compared to firms with less extreme valuations, highly valued firms have significantly higher discretionary accruals and exhibit a more pronounced positive association between discretionary accruals and proxies for the likelihood of failing to meet earnings targets. These findings are consistent with the use of discretionary accruals to manage earnings in support of extreme valuation. Because highly valued equity will likely result in CEOs with valuable stock and stock option portfolios, we test whether and show that the overvalued equity incentive is incremental to a CEO's equity portfolio incentive. One implication is that directors and audit committees should be especially on guard for possible earnings management when a firm has extremely high valuation multiples and when the CEO has a lot of equity at risk. [source] SOX: Unintended dilemmas for auditingJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 4 2006Jonathan Duchac The Sarbanes-Oxley Act of 2002 brought widespread changes to U.S. financial reporting. Companies now must report on internal control deficiencies. There are criminal penalties for false certification of financial reports. The new Public Company Accounting Oversight Board was established. And audit committees have enhanced responsibilities. Considered in isolation, these reforms appear to improve the quality of financial information and increase public confidence. But when considered as a whole,in the context of practical application,some unanticipated effects are causing audit dilemmas. And they may damage the quality of financial information. © 2006 Wiley Periodicals, Inc. [source] From Member of the Company to Registered Auditor: The Role of the External Auditor in Corporate GovernanceAUSTRALIAN ACCOUNTING REVIEW, Issue 1 2009C. Richard Baker Corporate governance has often been defined in a narrow way as comprising ,the range of control mechanisms that protect and enhance the interests of shareholders of business enterprises' (Fama and Jensen 1983). In the corporate governance literature there has also been a general focus on the structure and functioning of boards of directors and the responsibilities of audit committees in relation to external auditing (Rosenstein and Wyatt 1990;Shleifer and Vishny 1997). This article looks at the evolution of the role of external auditing in corporate governance. The role of the external auditor has changed through time, and consequently it should not be assumed that the role of external auditing is fixed or that it cannot be changed to meet societal needs and expectations. This observation leads to the primary argument of our article, which is that the role of the external auditor in corporate governance ought to be expanded in order to enhance the effectiveness of corporate governance for the benefit of a wider spectrum of stakeholders and society generally. [source] | ||||||||||||||||||||||||||||