Corporate governance: earnings management linkages: impact of audit committee composition and operational characteristics
by S. Mitchell Williams, Greg Tower
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 1, No. 4, 2004

Abstract: Our study documents a comprehensive simultaneous analysis of the association between five-audit committee composition and operational characteristics features and earnings management based on a sample of 485 organisational-years of Singapore publicly traded organisations. Findings provide only partition support for the view organisations with a higher proportion of independent audit committee members are more effective at constraining earnings management. Organisations with audit committees that are more diligent and/or lack the presence of independent directors serving simultaneously on a substantial number of boards and committees are more effective at constraining earnings management. Audit committee expertise and the presence of a senior executive director on the committee do not appear to influence the committee's ability to constrain earnings management. Our findings are robust to alternative income-incentives facing corporate management and entices associated with different levels of ownership concentration. Overall, our findings are rich with policy and practical implications.

Online publication date: Thu, 24-Feb-2005

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