Audit committee effectiveness and audit quality: the moderating effect of joint audit

Ahmed Elmashtawy, Mohd Hassan Che Haat, Shahnaz Ismail and Faozi A. Almaqtari

Arab Gulf Journal of Scientific Research, 2023, vol. 42, issue 3, 512-533

Abstract: Purpose - The main aim of the present study is to assess the moderating effect of joint audit (JA) on the relationship between audit committee effectiveness (ACEFF) and audit quality (AQ) in Egypt. Design/methodology/approach - The sample included 61 non-financial corporations listed on the Egyptian Exchange from 2016 through 2020. The results are estimated using panel data analysis with fixed-effect models. Findings - The findings exhibit that audit committee (AC) independence, ACEFF; and audit firm size negatively affect AQ. Conversely, the influence of AC meetings on AQ is positive and significant. The findings also reveal that JA moderates the relation between the ACEFF and AQ. Research limitations/implications - The study offers theoretical contributions to corporate governance mechanisms, JA; and AQ by using data from listed firms in Egypt. The study is the first one that examines the moderating role of JA on ACEFF and AQ. Practical implications - The study has practical implications for investors, board members, practitioners, academicians; and policymakers. Moreover, the study contributes using a composite measure for the ACEFF score. Originality/value - The findings, supported by agency, resource dependence; and signaling theories, contribute to a better understanding of the relationship between ACEFF, AQ; and JA. The evidence about JA is still unknown in developing countries. Further, revisiting AQ with different measures, particularly accounting conservatism, has not been a subject of prior studies.

Keywords: Accounting conservatism; Audit quality; Audit committee effectiveness; Joint audit; Egypt (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:agjsrp:agjsr-09-2022-0202

DOI: 10.1108/AGJSR-09-2022-0202

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