Audit Committee Effectiveness: Evidence from an Emerging Market Economy

• In Event: International Accounting

Abstract

The recent global financial crisis and economic recession has further heightened the interest in corporate governance in the Middle East. This paper addresses a research gap in the literature to investigate the effectiveness of audit committees from the perspective of audit committee members for a sample of listed companies in an emerging economy country, namely the Saudi Arabia. We survey audit committee members to obtain their perceptions about characteristics and roles of audit committees, and then compare these with the assigned responsibilities disclosed in the annual reports in order to measure the effectiveness of the audit committees. Consistent with prior studies, our results suggest that there is generally a lack of interest among audit committee members in their oversight responsibilities over issues related to internal control and financial reporting. Potential implications are discussed.

Authors

• Hassan HassabElnaby, University of Toledo

• Al-Aali Abdulrahman <, King Saud University

• Kathryn Chang, University of Toledo