Conflict of opinion on accounting policy judgements: independence, knowledge and problem-solving ability of audit committees in Malaysia
by Rita Anugerah; Takiah Mohd Iskandar; Zuraidah Mohd Sanusi
International Journal of Business Governance and Ethics (IJBGE), Vol. 6, No. 4, 2011

Abstract: This study employs a field experiment to investigate the effectiveness of audit committee monitoring role. The study relates three audit committee characteristics, independence, financial knowledge and problem-solving ability with judgements on conflicts of opinion between management and auditors on accounting policy. Participants are members of audit committees of public listed companies in Malaysia. Using a Partial Least Squares (PLS) analysis, results show that independence, financial knowledge and ability to solve problems influence audit committee judgements. Financial knowledge mediates the effect of problem-solving ability on the judgements. There is a need for a proper membership selection policy to improve audit committee effectiveness.

Online publication date: Fri, 06-Jan-2012

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