Title: Audit committee characteristics and accounting conservatism: does the power of people matter?

Authors: Dina El Mahdy; Ling Yang; Asmaa Abdelrazeik; Rasha Elbolok

Addresses: Department of Accounting and Finance, Morgan State University, 4100 Hillen Road, Baltimore, MD 21218, USA ' Accounting Department, New Jersey City University, 2039 Kennedy Blvd., Jersey City, NJ 07305, USA ' Accounting Department, Port Said University, University Administration, Port Fouad City, Port Said Governorate 42526, Egypt ' Accounting Department, The British University in Egypt, El Sherouk City, Suez Desert Road, Cairo 11837 – P.O. Box 43, Egypt; Suez Canal University, El Sheikh Zayed, El Salam District, Ismailia Governorate 8366004, Egypt

Abstract: This study employs the developmental democracy theory to predict that the 2011 Egyptian Revolution created a demand for a better governance structure in the form of efficient audit committees, which led to increased conservative financial reporting. Using a sample of 605 firm-year observations from the 100 most active companies listed on the Egyptian stock market between 2009 and 2019, the study examines the effect of five audit committee characteristics on accounting conservatism post-Egyptian Revolution. The empirical results show that audit committee financial expertise, diligence, and interlock are positively associated with accounting conservatism, while audit committee size is negatively associated. Moreover, the 2011 Egyptian Revolution amplified the influence of audit committee characteristics on the timeliness of economic loss recognition, further promoting conservative financial reporting. This study is among the first to explore the moderating effect of the 2011 Egyptian Revolution on the relationship between audit committee characteristics and accounting conservatism.

Keywords: corporate governance; audit committee characteristics; accounting conservatism; The Egyptian Revolution.

DOI: 10.1504/IJCG.2025.145658

International Journal of Corporate Governance, 2025 Vol.15 No.2, pp.99 - 126

Accepted: 20 Nov 2024
Published online: 11 Apr 2025 *

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