The Effect of Audit Committee Expertise and Industry Specialist Auditor on Financial Reporting Quality

• Main Authors: Yu-ChingWu, 吳育菁
• Other Authors: Yu-Ting Hsieh
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/26ysky

碩士 === 國立成功大學 === 會計學系 === 104 === Extant literatures mostly focus on accounting or financial expertise than industry expertise of audit committees. However, accounting estimates and guidance are different by industries. Industry knowledge is thus valuable for audit committee members to properly monitor complex industry-specific accounting issues on financial reporting. Hence, this paper investigates whether audit committee industry expertise can enhance financial reporting quality. Besides, financial reporting quality is also influenced by the professionalism of external auditors. Therefore, this study also examines whether financial reporting quality is better when companies are monitored by audit committee accounting, financial, or industry expertise and industry-specialized audit firm simultaneously. Analyzing 806 Taiwanese listed firm-year observations with audit committee during 2007-2014, I find that audit committee industry expertise is not significantly associated with financial reporting quality. The empirical results indicate that audit firm industry expertise can significantly improve financial reporting quality whether they are assisted by audit committee industry, accounting, or financial expertise or not. Companies with audit committee industry or accounting financial expert and audit firm industry specialist have insignificantly negative relationship with discretionary accruals.