Audit Committees and Financial Reporting Quality in Singapore

Audit Committees and Financial Reporting Quality in Singapore

We examine three characteristics (independence, expertise, and overlapping membership) of audit committees and their impact on the financial reporting quality for Singapore-listed companies. The main finding is that financial reporting quality will be higher if audit committees have mixed expertise...

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Bibliographic Details
Main Authors: Yuanto KUSNADI, Kwong Sin LEONG, SUWARDY, Themin, Jiwei WANG
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2016
Subjects:
Audit committee
Corporate governance
Expertise
Financial reporting quality
Independence
Overlapping membership
Accounting
Asian Studies
Corporate Finance
Online Access:https://ink.library.smu.edu.sg/soa_research/1446
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Institution: Singapore Management University
Language: English
Description
Summary:We examine three characteristics (independence, expertise, and overlapping membership) of audit committees and their impact on the financial reporting quality for Singapore-listed companies. The main finding is that financial reporting quality will be higher if audit committees have mixed expertise in accounting, finance, and/or supervisory. In addition, we do not find evidence that incremental independence of audit committees enhances financial reporting quality because audit committees already consist of a majority of independent directors. Finally, we fail to find any impact of overlapping membership on audit and remuneration committees on financial reporting quality. Overall, the results have policy implications on improving corporate governance effectiveness in terms of financial reporting quality.

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