Open AccessCan the Audit Committee Provide Better Oversight of Listed Companies? – An Efficiency of Cash Holdings Perspective
Author(s) -
Chusheng Huang,
WeiJu Chen,
Kuo-Chen Lu
Publication year - 2016
Publication title -
asian journal of finance and accounting
Language(s) - English
Resource type - Journals
ISSN - 1946-052X
DOI - 10.5296/ajfa.v8i1.9064
Subject(s) - audit committee , accounting , business , stock exchange , audit , audit evidence , sample (material) , joint audit , chief audit executive , corporate governance , finance , internal audit , chemistry , chromatography
This study attempts to inspection the efficient of using cash holdings whether is improved after setting up audit committee sound corporate governance from the perspective of reducing agency costs. We use the difference in difference method to investigate the effect of oversight of audit committee from 2007 to 2010 the company with audit committee for sample. The empirical results show that the using efficiency of cash holdings isn’t promoted after setting up audit committee with all listed companies sample. We further divided the sample into the over-the-counter (OTC) market and the Taiwan Stock Exchange (TSE) market according to the stock market feather. The empirical indicated that the Taiwan Stock Exchange (TSE) market listed sample exhibited the effect of oversight of audit committee; however, the over-the-counter (OTC) market listed is not. It indicated that the different market structure did affect the effect of oversight of audit committee.