Audit committees and earnings quality

Article

Baxter, Peter and Cotter, Julie. 2009. "Audit committees and earnings quality." Accounting and Finance. 49 (2), pp. 267-290. https://doi.org/10.1111/j.1467-629X.2008.00290.x
Article Title

Audit committees and earnings quality

ERA Journal ID19059
Article CategoryArticle
AuthorsBaxter, Peter (Author) and Cotter, Julie (Author)
Journal TitleAccounting and Finance
Journal Citation49 (2), pp. 267-290
Number of Pages24
Year2009
PublisherJohn Wiley & Sons
Place of PublicationMelbourne, Australia
ISSN0810-5391
1467-629X
Digital Object Identifier (DOI)https://doi.org/10.1111/j.1467-629X.2008.00290.x
Web Address (URL)http://www3.interscience.wiley.com/cgi-bin/fulltext/121524242/PDFSTART
Abstract

This research investigates whether audit committees are associated with improved earnings quality for a sample of Australian listed companies prior to the introduction of mandatory audit committee requirements in 2003. Two measures of earnings quality are used based on models first developed by Jones (1991) and Dechow and Dichev (2002). Our results indicate that formation of an audit committee reduces intentional earnings management but not accrual estimation errors. We also find differences in the associations between audit committee accounting expertise and the two earnings quality measures. Other audit committee characteristics examined are not significantly related to either earnings quality measure.

Keywordsaudit committees; corporate governance; earnings management; earnings quality
ANZSRC Field of Research 2020350103. Financial accounting
350102. Auditing and accountability
380203. Economic models and forecasting
Public Notes

File reproduced in accordance with the copyright policy of the publisher/author.

Byline AffiliationsUniversity of the Sunshine Coast
School of Accounting, Economics and Finance
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