Exploring Audit Committee Practices: Oversight of Financial Reporting and External Auditor in an Emerging Economy

• In Event: Breakfast and Research Forum
  In Roundtable Session: Table 19: Reporting Issues

Abstract

The existing body of literature on audit committees focuses on the effectiveness of audit committees in the outsider model of corporate governance. This research investigation examines audit committees in a setting representing the insider model of corporate governance in a transition economy, specifically raising questions about the resources and processes of audit committees. Results of the study suggest that in the insider model of corporate governance the audit committee, as a monitoring device, assumes a less important role, as the large owners can directly oversee the financial aspects of the company. The audit committees have limited resources to perform their responsibilities, so the oversight processes are taking on a less formal format. The audit committee, in this setting, seems to play a more ceremonial role and focuses more on form than substance.

Author

• Dorota Dobija, Kozminski University