Title: Evaluating the role and effectiveness of the audit committee on the quality of financial reporting: evidence from Greek PIEs

Authors: Constantinos Chalevas; Panagiotis Giannopoulos; Andreas Koutoupis; Angeliki Samara

Addresses: Department of Accounting and Finance, Athens University of Economics and Business, Athens, Greece ' Hellenic Accounting and Auditing Standards, Oversight Board, 7 Voulis St., Athens, Greece ' Department of Accounting and Finance, University of Thessaly, Volos, Greece ' Department of Accounting and Finance, University of Macedonia, Thessaloniki, Greece

Abstract: A new audit law was set in force in Greece in 2017 in accordance with the provisions of the European Regulation 537/2014, which reinforces the role of the audit committee (AC) and introduces new audit requirements. This study investigates the impact of the adoption of the new audit law on the quality of financial reporting. The used variables derived from the major law requirements and were measured appropriately using the responses of audit committees to a structured questionnaire developed to capture the compliance of the entities with the new law provisions. The sample is randomly selected, consists of 138 public interest entities (PIEs) for the year 2018 and concerns firms of various sizes and sectors. Our model contains a set of variables, solely derived from the new audit law. Audit committee composition and skills, its duty to make statutory auditors (or audit firms) understand the business of the entity as long with its responsibility for monitoring the independence of the statutory auditor and the effectiveness of the entity's internal quality control seem to significantly improve the quality of financial reporting.

Keywords: audit committee; financial reporting; internal audit.

DOI: 10.1504/IJBAAF.2021.10041386

International Journal of Banking, Accounting and Finance, 2021 Vol.12 No.4, pp.368 - 388

Received: 29 Sep 2020
Accepted: 25 Apr 2021

Published online: 29 Oct 2021 *

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