دانلود رایگان مقاله انگلیسی کمیته های حسابرسی و کیفیت گزارشگری مالی: دیدگاه ماده 8 اتحادیه اروپا - الزویر 2018

ABSTRACT

In order to increase corporate governance quality, the 8th EU Company Law Directive enacted a mandatory audit committee in publicly listed companies in the EU and defined its tasks and responsibilities. In response to the directive, we examine the incremental value of audit committee monitoring effectiveness and audit committee competencies over the mere existence of an audit committee. We find that audit committee monitoring effectiveness and competencies are positively associated with financial reporting quality, whereas, somewhat surprisingly, the effect of the existence of an audit committee is negative. This finding shows that the existence of audit committees is a necessary but not a sufficient condition for enhancing financial reporting quality. Collectively, the study’s findings suggest that the 8th Directive has had a positive effect on corporate governance quality and, in turn, financial reporting quality in the EU.

6. Conclusion

In response to the 8th EU Company Law Directive, we examined the impact of audit committee monitoring effectiveness and audit committee competencies on financial reporting quality in publicly listed companies in the EU. We found that audit committee monitoring effectiveness and competencies are positively associated with financial reporting quality, while the existence of an audit committee is negatively associated with financial reporting quality.

The key implication of the findings above is that the formal existence of an audit committee within a company is just a necessary, but not a sufficient condition for enhancing financial reporting quality. As our results suggest, a combination whereby the audit committee is not immersed in monitoring activities and/or is incompetent is of little value when it comes to enhancing corporate governance and financial reporting quality.

Another important implication of our study is that the 8th CLD has enhanced the quality of audit committees and, in turn, the quality of corporate governance and financial reporting in the EU. Nevertheless, despite the apparent positive effects, we also identified room for improvement. For example, the current version of the directive calls for at least one independent member of an audit committee, although it is questionable whether a committee composed of one independent and several dependent members can indeed be considered independent. Another issue we identified is the low transparency in disclosing audit committees’ monitoring effectiveness.