Resumen de The impact of audit committee characteristics on financial reporting quality: Evidence from saudi arabia
Purpose: The purpose of this study is to investigate the impact of audit committee characteristics, namely independent members in the audit committee, a financial expert in the audit committee, frequency of meetings, and audit committee size on financial reporting quality proxies by qualified audit opinion, to shed light on the role of audit committee characteristics towards the financial reporting quality with audit quality as one of the control variables, particularly the appointment of Big 4 company.
Design/Methodology/Approach: A sample of 292 observations from Saudi non-financial listed companies from 2019 -2022 were collected from annual reports across four years and analyzed using panel data. To analyze the proposed hypothesis, the study employed multiple linear regression and logistic regression.
Findings: The results indicate that the only audit committee characteristic statistically related to financial reporting quality measured by qualified audit opinion is the financial expert's number. There is also evidence that audit quality measured by audit company size (Big4) is positively related to the audit committee and financial reporting quality.
Research Limitations/Implications: The study’s main limitation is that a large sum of the data collected are traced back to the lockdown period. Therefore, the examined issues could change in the future due to the shift in priorities that the COVID-19 pandemic is determining.
Practical Implications: The result will help accountancy professionals and governments as it highlights the relevance of qualified audit opinions to audit committees and enhances audit committees’ characteristics and role in improving audit quality. The findings of this study contribute to the current audit quality and reporting literature.
