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Audit committees and financial reporting quality

Author

Listed:
  • Habiba Al-Shaer
  • Aly Salama
  • Steven Toms

Abstract

Purpose - The purpose of this paper is to examine the determinants of the volume of environmental disclosures and their quality, with particular focus on the role of audit committees (ACs) and the effects of the Smith report recommendations for the UK Corporate Governance Code. Design/methodology/approach - Quantitative large sample analysis of UK FTSE350 companies for the period 2007-2011. Findings - Firms with higher quality ACs make higher quality disclosures. Larger firms with block shareholders have greater volume of disclosures, whilst AC quality does not increase disclosure volume. Research limitations/implications - Findings are based on evidence from single country and imply further international comparative research. Practical implications - ACs mitigate the requirement for prescriptive legislation on narrative accounting disclosures relating to environmental issues. Originality/value - The paper contributes to research that has examined the relationship between corporate governance mechanisms, specifically ACs, and the quality of financial reporting by considering voluntary narrative disclosures on environmental matters.

Suggested Citation

  • Habiba Al-Shaer & Aly Salama & Steven Toms, 2017. "Audit committees and financial reporting quality," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 18(1), pages 2-21, February.
    • Handle: RePEc:eme:jaarpp:jaar-10-2014-0114
    DOI: 10.1108/JAAR-10-2014-0114
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    Citations

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    Cited by:

    1. Yousef Alwardat, 2019. "Disclosure Quality and its Impact on Financial Reporting Quality, Audit Quality, and Investors’ Perceptions of the Quality of Financial Reporting: A Literature Review," Accounting and Finance Research, Sciedu Press, vol. 8(3), pages 201-201, August.
    2. Dobija Dorota, 2019. "Institutionalizing Corporate Governance Reforms in Poland: External Auditors’ Perspective," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 27(3), pages 28-54, September.
    3. Philna Coetzee & Lourens J. Erasmus, 2020. "Driving Audit Committee Disclosure: Legislation Versus Best Practice," Business Perspectives and Research, , vol. 8(1), pages 36-50, January.
    4. Claudia Catalina CIOCAN & Mihai CARP & Iuliana GEORGESCU, 2021. "The Determinants of the Financial Reporting Quality: Empirical Evidence for Romania," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 19(162), pages 301-301, May.
    5. Habiba Al-Shaer & Muhammad Farhan Malik & Mahbub Zaman, 2022. "What do audit committees do? Transparency and impression management," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(4), pages 1443-1468, December.
    6. Qasim Ahmad Alawaqleh & Nashat Ali Almasria, 2021. "The Impact of Audit Committee Performance and Composition on Financial Reporting Quality in Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 55-69, May.
    7. Habiba Al‐Shaer & Mahbub Zaman, 2018. "Credibility of sustainability reports: The contribution of audit committees," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 973-986, November.
    8. Grigoris Giannarakis & Andreas Andronikidis & Nikolaos Sariannidis, 2020. "Determinants of environmental disclosure: investigating new and conventional corporate governance characteristics," Annals of Operations Research, Springer, vol. 294(1), pages 87-105, November.

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