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The Influence of Audit Committee Chair Characteristics on Financial Reporting Quality

Author

Listed:
  • Abdalwali Lutfi

    (Department of Accounting, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia
    Applied Science Research Center, Applied Science Private University, Amman 11931, Jordan)

  • Saleh Zaid Alkilani

    (Department of Accounting, College of Business (COB), Universiti Utara Malaysia, Sintok 06010, Kedah, Malaysia)

  • Mohamed Saad

    (Department of Accounting, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

  • Malek Hamed Alshirah

    (Department of Accounting, Faculty of Economics and Administrative Sciences, Al Al-Bayt University, Al-Mafraq 25113, Jordan)

  • Ahmad Farhan Alshirah

    (Accounting Department, Faculty of Administrative and Financial Sciences, Irbid National University, Irbid 21110, Jordan)

  • Mahmaod Alrawad

    (Quantitative Method Department, College of Business Administration, King Faisal University, Al Ahsa 31982, Saudi Arabia
    Department of Accounting, Finance and Banking, College of Business Administration and Economics, Al-Hussein Bin Talal University, Ma’an 71111, Jordan)

  • Malak Akif Al-Khasawneh

    (Independent Researcher, Amman 11931, Jordan)

  • Nahla Ibrahim

    (Department of Accounting, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

  • Abeer Abdelhalim

    (Department of Accounting, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

  • Mujtaba Hashim Ramadan

    (Quantitative Method Department, College of Business Administration, King Faisal University, Al Ahsa 31982, Saudi Arabia)

Abstract

This study examines the extent to which the characteristics of the audit committee chair enhance the quality of financial reports and reduce the possibility for companies to receive a modified audit opinion (MAO) from an external auditor. We apply logistic regression to investigate the influence of Audit Committee Chair (ACC) characteristics on the FRQ (FRQ), for a sample of 460 firm-year observations (service and industrial company listed) on the Amman stock exchange for the years 2017–2020. This study uses the MAO as a proxy for Financial Reporting Quality (FRQ). The results of this study confirmed that the characteristics of the chair of the audit committee have significant and clear impacts on the quality and efficiency of financial reports, which is in line with previous studies that have addressed this topic. The results also indicated that researchers, academics, regulators, and policymakers should not look just at the characteristics of audit committees as a whole, given that audit committee chairs have effects on financial reports. This study presents its contribution through experimental demonstration of the characteristics of the chair of the audit committee and how these affect the financial reports of companies. It also provides a guide for benefits for working to provide a basis for organizational procedures, especially those related to the impact on corporate boards and internal and external auditing.

Suggested Citation

  • Abdalwali Lutfi & Saleh Zaid Alkilani & Mohamed Saad & Malek Hamed Alshirah & Ahmad Farhan Alshirah & Mahmaod Alrawad & Malak Akif Al-Khasawneh & Nahla Ibrahim & Abeer Abdelhalim & Mujtaba Hashim Rama, 2022. "The Influence of Audit Committee Chair Characteristics on Financial Reporting Quality," JRFM, MDPI, vol. 15(12), pages 1-15, November.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:12:p:563-:d:987966
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    References listed on IDEAS

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    1. Stuart Turley & Mahbub Zaman, 2007. "Audit committee effectiveness: informal processes and behavioural effects," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 20(5), pages 765-788, September.
    2. Abernathy, John L. & Beyer, Brooke & Masli, Adi & Stefaniak, Chad, 2014. "The association between characteristics of audit committee accounting experts, audit committee chairs, and financial reporting timeliness," Advances in accounting, Elsevier, vol. 30(2), pages 283-297.
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    5. Ghafran, Chaudhry & O'Sullivan, Noel, 2017. "The impact of audit committee expertise on audit quality: Evidence from UK audit fees," The British Accounting Review, Elsevier, vol. 49(6), pages 578-593.
    6. Mark L. Defond & Rebecca N. Hann & Xuesong Hu, 2005. "Does the Market Value Financial Expertise on Audit Committees of Boards of Directors?," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 43(2), pages 153-193, May.
    7. Ling Lei Lisic & Linda A. Myers & Timothy A. Seidel & Jian Zhou, 2019. "Does Audit Committee Accounting Expertise Help to Promote Audit Quality? Evidence from Auditor Reporting of Internal Control Weaknesses†," Contemporary Accounting Research, John Wiley & Sons, vol. 36(4), pages 2521-2553, December.
    8. Wu, Chloe Yu-Hsuan & Hsu, Hwa-Hsien & Haslam, Jim, 2016. "Audit committees, non-audit services, and auditor reporting decisions prior to failure," The British Accounting Review, Elsevier, vol. 48(2), pages 240-256.
    9. Laura Sierra García & Emiliano Ruiz Barbadillo & Manuel Orta Pérez, 2012. "Audit committee and internal audit and the quality of earnings: empirical evidence from Spanish companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(2), pages 305-331, May.
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    Cited by:

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    2. Mediaty & Grace T. Pontoh & Nadhirah Nagu & Rahmawati HS & Anis Anshari Mas’ud & Rozainun Haji Abdul Aziz, 2025. "Human Competencies: Amplifying Financial Reporting Quality in Indonesian Local Government," JRFM, MDPI, vol. 18(8), pages 1-21, August.
    3. Abdulaziz Al Naim & Abdulrahman Alomair, 2025. "The role of female representation in enhancing audit quality: Insights from Saudi Arabia’s emerging market," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-16, December.
    4. Mahmoud Nassar & Yousef Abu Siam & Mohammad Haroun Sharairi & Khalil Nimer, 2026. "Free Cash Flow as a Moderator Between Board Characteristics and Dividend Policy: Evidence from Jordan’s Industrial Sector," Advances in Decision Sciences, Asia University, Taiwan, vol. 30(3), pages 63-88, September.
    5. Huang, Rui & Liu, Yanran & Li, Xiang, 2026. "Audit committee chairs' narcissism and audit quality," International Review of Financial Analysis, Elsevier, vol. 110(C).

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