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Author: Jagan Krishnan
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
Recent debates on audit committee financial expertise have focused on quot;accountingquot; and quot;non-accountingquot; financial experts. A significant proportion of firms do not appoint accounting financial experts (i.e., persons with specialized accounting/auditing experience) to their audit committees. We examine the determinants of firms' choice of the quot;audit committee financial expertsquot;, for a sample of Fortune 1000 firms. We test the relation between the demand for accounting financial experts (AFEs), potential litigation risk, and corporate governance. We find that firms with higher litigation risk are more likely to have AFEs on their audit committee. However, the association between litigation risk and the likelihood of appointing accounting financial experts occurs for firms with relatively strong governance but not for those with weak governance. Thus, our findings indicate that (1) companies with demand for accounting financial experts - measured by potential litigation risk - seem to be able to secure accounting financial experts but (2) such benefits only accrue in the presence of otherwise strong corporate governance.
Author: Jagan Krishnan
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
Recent debates on audit committee financial expertise have focused on quot;accountingquot; and quot;non-accountingquot; financial experts. A significant proportion of firms do not appoint accounting financial experts (i.e., persons with specialized accounting/auditing experience) to their audit committees. We examine the determinants of firms' choice of the quot;audit committee financial expertsquot;, for a sample of Fortune 1000 firms. We test the relation between the demand for accounting financial experts (AFEs), potential litigation risk, and corporate governance. We find that firms with higher litigation risk are more likely to have AFEs on their audit committee. However, the association between litigation risk and the likelihood of appointing accounting financial experts occurs for firms with relatively strong governance but not for those with weak governance. Thus, our findings indicate that (1) companies with demand for accounting financial experts - measured by potential litigation risk - seem to be able to secure accounting financial experts but (2) such benefits only accrue in the presence of otherwise strong corporate governance.
Author: Dan S. Dhaliwal
Publisher:
ISBN:
Category :
Languages : en
Pages : 52
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Book Description
Following the enactment of the Sarbanes Oxley Act 2002, US stock exchanges strongly advocate the presence of financial experts on audit committees. However, the ideal definition of financial expertise proves to be a controversial issue culminating with the stock exchanges adopting a wide scoped definition of financial expertise. Using this definition, prior studies have not provided consistent evidence of financial expertise positively influencing audit committee effectiveness. We investigate the association between three types of audit committee financial expertise (accounting, finance and supervisory expertise) and accruals quality. We find significant positive relation between accounting expertise and accruals quality, which is more pronounced in the presence of strong audit committee governance. The findings indicate that the current definition of financial expertise is too broad and any future refinements must focus on accounting expertise of the audit committee members.
Author: Frank M. Burke
Publisher: CCH
ISBN: 9780808091646
Category : Business & Economics
Languages : en
Pages : 468
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Book Description
Author: Louis Braiotta, Jr.
Publisher: John Wiley & Sons
ISBN: 0470616075
Category : Business & Economics
Languages : en
Pages : 415
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Book Description
The Audit Committee Handbook, Fifth Edition The Audit Committee Handbook, Fifth Edition guides you to: Understand the role and responsibilities of the audit committee with a general update and reality check on auditing cycle activities Identify the developments that impact audit committee practices and the most current techniques and strategies for committee meetings Develop a repertoire of effective strategies to help the board of directors discharge its fiduciary responsibility to shareholders Prepare a periodic assessment of professional development activities and an informed review of both audit processes and financial reporting processes A must-have for all audit committee members, board directors, corporate secretaries, CEOs, CFOs, and auditors involved in the accounting practices of their firms, The Audit Committee Handbook, Fifth Edition is the most authoritative work on audit committees in the marketplace.
Author: Curtis C. Verschoor
Publisher: John Wiley & Sons
ISBN: 0470337079
Category : Business & Economics
Languages : en
Pages : 258
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Book Description
Praise for Audit Committee Essentials "Audit Committee Essentials is an excellent and comprehensive resource, documented with key references and illustrated with real-life company examples for all types of commercial and nonprofit enterprises. Dr. Verschoor brings into focus the intertwined impact of risk management, internal controls, and ethics on oversight responsibilities for both the audit committee and the entire board of directors. From my personal perspective as an audit committee member and as a director of both profit and nonprofit entities, this book should be required reading for corporate management, boards of directors, and their committees." --George K. Gill, Chairman and CEO of PetAg, Inc.; Director and member of the Investment and Audit Committees of the United Methodist Foundation of Northern Illinois "Maintaining the highest ethical standards is critical to the success of not-for-profits in today's world. Dr. Verschoor's book provides a practical, highly prescriptive approach to ensuring that governance processes meet the highest expectations of managers, employees, volunteers, contributors, and other stakeholders. I am very impressed with the readability of the book. It definitely raises one's awareness of the need for a thought-out plan that ensures strong financial and ethical credibility." --John S. Maxson, President and CEO Greater North Michigan Avenue Association, Chicago, Illinois A concise and readable account of the audit committee's roles and responsibilities The Sarbanes-Oxley Act has changed the way all corporations now operate, regardless of size. In Audit Committee Essentials, goverance expert Curtis Verschoor explains with great detail and razor-sharp precision why internal control is so critical, emphasizing financial literacy, a requirement under Sarbanes-Oxley, as well as oversight of the financial reporting process and related controls, ethics and the internal and independent audits. Written for seasoned professionals as well as newly assigned board members, Audit Committee Essentials is a vital tool in order to stay abreast of the rapidly changing governance requirements and responsibilities of audit committees.
Author: Chris E. Hogan
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
This study investigates factors associated with restatement-related litigation against U.S. audit committee members. Using a sample of restatement-related litigation in the U.S. over the period 1999-2012, we find that the likelihood of audit committee litigation is higher in the post-SOX time period when financial reporting and auditor oversight responsibilities were significantly increased. This finding suggests that increased legal liability post-SOX could reduce the pool of qualified candidates willing to serve on the audit committee. We find that directors serving on the audit committee for a longer portion of the class action period and those with net insider selling activity during the class action period are more likely to be named as defendants. However, audit committee chairs, financial experts, and audit committee members serving on the compensation committee are no more likely to be named as defendants than other audit committee members, contrary to the perceptions of many officers and directors. Overall, our study provides insights into when audit committee members face higher litigation risk and useful information for the recruitment and retention of audit committee members.
Author: Catherine L. Bromilow
Publisher: Iia Research Foundation
ISBN:
Category : Business & Economics
Languages : en
Pages : 180
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Book Description
Author: Joseph V. Carcello
Publisher:
ISBN:
Category :
Languages : en
Pages : 55
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Book Description
A prime objective of the Sarbanes-Oxley Act and recent changes to stock exchange listing standards is to improve the quality of financial reporting. We examine the associations between audit committee financial expertise and alternate corporate governance mechanisms and earnings management. We find that both accounting and certain types of non-accounting financial expertise reduce earnings management for firms with weak alternate corporate governance mechanisms, but that independent audit committee members with financial expertise are most effective in mitigating earnings management. Importantly we find that alternate corporate governance mechanisms are an effective substitute for audit committee financial expertise in constraining earnings management. Finally, we find either no association or a positive association between financial expertise and real earnings management. Our results suggest that alternate governance approaches are equally effective in improving the quality of financial reporting, and that firms should have the flexibility to design the particular set of governance mechanisms that best fit their unique situations.
Author: Jillian Alderman
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
Abstract: This study examines whether the perceived independence and financial expertise of audit committee members affect external auditors' exposure to legal liability. We use an experiment in which potential jurors make judgments about auditor independence and legal liability for a case involving an audit failure. We find that perceptions of audit committee independence from management are positively associated with judgments of auditor independence and negatively associated with auditor liability. However, financial expertise of audit committee members can be a double-edged sword. Our experiment finds that judgments of auditor liability are higher when the audit committee is perceived to have higher financial expertise but lower independence from management. In assessing litigation risk of current and prospective clients, auditors may want to carefully consider the independence of audit committee members from management, particularly when audit committee members have financial expertise. In the event of an audit failure, the financial expertise of non-independent audit committee members can negatively affect jurors' perceptions of auditor independence and liability.
Author:
Publisher:
ISBN:
Category : Audit committees
Languages : en
Pages : 662
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Book Description
