Effect of Board Financial Expertise on the Relationship between Audit Committee Size and Financial Reporting Quality
Subject Areas : Corporate governanceJavad Ghanbari 1 * , Mohammadreza Nikbakht 2 , Rasoul Lotfi 3
1 - BSc. Student, Department of accounting, Higher education of Takestan, Takestan, Iran.
2 - Prof., Department of Accounting, Tehran University, Tehran, Iran.
3 - Assistant prof., Department of accounting, Higher education of Takestan, Takestan, Iran.
Keywords: Audit Committee Size, Board Financial Expertise, Financial Reporting Quality, Accruals Quality.,
Abstract :
The quality of financial reporting plays an important role in the decision-making of different stakeholders. One of the factors that affects the quality of financial reporting is corporate governance. The size of the audit committee and the financial expertise of the board of directors are considered as corporate governance mechanisms. From the perspective of stakeholder, upper echelons and agency theories, the above-mentioned variables lead to improved quality of financial reporting. Therefore, the purpose of this study was to investigate the effect of the financial expertise of the board of directors on the relationship between the size of the audit committee and the quality of financial reporting. Thus, using the data of 92 companies listed on Tehran Stock Exchange and using multivariate regression models with panel data, this issue was investigated. The findings showed that the size of the audit committee had a positive and significant effect on the quality of financial reporting; moreover, the financial expertise of the board of directors positively moderated the relationship between the size of the audit committee and the quality of financial reporting. Policymakers, investors and creditors can use the results of the present study to make decisions with an open view regarding the role of the size of the audit committee and the financial expertise of the board of directors.
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