March 2018

Questioning the Effectiveness of Independent Audit Committees

Does the Current Regulatory Regime Improve Reporting Quality?

In Brief

At the root of over a decade of regulation and best practices is the premise that the structure and independence of a company’s audit committee has a direct effect on the quality of its financial reporting. The empirical evidence to support this proposition, however, is scant. The author conducted a major research project that investigated the effects of audit committee size and independence standards on the quality of financial reporting by public companies.