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The Impact of Audit Committee Characteristics on the Enhancement of the Quality of Financial Reporting: an empirical study in the Spanish context
Author(s) -
PuchetaMartínez Maria Consuelo,
De Fuentes Cristina
Publication year - 2007
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/j.1467-8683.2007.00653.x
Subject(s) - accounting , audit committee , receipt , audit , context (archaeology) , business , corporate governance , auditor's report , audit evidence , joint audit , quality audit , quality (philosophy) , scope (computer science) , internal audit , finance , computer science , paleontology , philosophy , epistemology , biology , programming language
The purpose of this paper is to analyse the relationship between the likelihood that a company will receive a qualified audit report (as a measure of the quality of financial information) and the existence and characteristics of the audit committee (AC). For listed companies that voluntarily created an AC in the period following the publication in 1998 of the Spanish Code of Corporate Governance, known as the Olivencia Code, we find that ACs size, the percentage of independent members in ACs, company size, losses reported in either or both of the previous two years, receiving the same qualified audit opinion as in the previous year and ownership concentration affect the likelihood of receiving error or non‐compliance qualifications. However, the existence of an AC and its composition are not factors associated with the receipt of audit reports containing uncertainties or scope limitations, while losses reported in either or both of the previous two years and receiving the same qualified opinion as in the previous year are.