Journal article
Certification of Audit Committee Effectiveness: Evidence from a One-Time Regulatory Event in China
Journal of international accounting research, v 20(2)
01 Jun 2021
Abstract
ABSTRACT
The China Securities Regulatory Commission (CSRC) launched the Campaign for Strengthening Corporate Governance of Public Companies in 2007. As part of this pilot program, public firms were required to report to the CSRC whether their boards had established audit committees and whether these audit committees operated effectively. Using this unique one-time regulatory event in China, we examine whether it is informative for firms to certify the effectiveness of their audit committees. Through analyzing hand-collected data from the campaign reports filed with the CSRC, we find that firms with certified audit committee effectiveness are associated with less earnings management and are less likely to have modified audit opinions and delayed filings. Thus, our findings suggest that certification of audit committee effectiveness provides a firm an opportunity to credibly signal that its audit committee functions in substance rather than in appearance.
JEL Classifications: M41; M42; M48.
Metrics
Details
- Title
- Certification of Audit Committee Effectiveness: Evidence from a One-Time Regulatory Event in China
- Creators
- Hsihui Chang - Drexel UniversityXin Chen - Shanghai Jiao Tong UniversityC. S. Agnes Cheng - Hong Kong Polytechnic UniversityNan Zhou - University of Cincinnati
- Publication Details
- Journal of international accounting research, v 20(2)
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Accounting
- Web of Science ID
- WOS:000695838200001
- Scopus ID
- 2-s2.0-85115288861
- Other Identifier
- 991019168898704721
InCites Highlights
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance