An Examination of the Effects of Change in Committee Chair on Audit Quality

Izhar Haq, Teresa Lang and Hongkang Xu

Accounting and Finance Research, 2017, vol. 6, issue 4, 52

Abstract: This study uses GMI Ratings directorship data from 2008 to 2013 along with the associated financial data to examine the relationship between audit committee chair change with the absolute discretionary accruals in the financial statements of the reporting companies.  Our results suggest that audit committee chair change is positively associated with the absolute discretionary accruals.  Specifically, absolute discretionary accruals are significantly higher when there is a change in the audit committee chair.  These results are consistent with prior research that deviations from the predicted values of accruals is an indicator of “poor†audit quality.  An additional finding of this paper is that a person younger than 60 is more likely to be a new audit committee chair when there is a change and therefore will have less experience and contacts than the outgoing chair. An important implication of these results is that audit committee chair change can have a significant impact on the quality of the financial statements of a company as well as on the audit quality.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.sciedupress.com/journal/index.php/afr/article/download/11898/7725 (application/pdf)
https://www.sciedupress.com/journal/index.php/afr/article/view/11898 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jfr:afr111:v:6:y:2017:i:4:p:52

Access Statistics for this article

More articles in Accounting and Finance Research from Sciedu Press Contact information at EDIRC.
Bibliographic data for series maintained by Sciedu Press ().