The Impact of Audit Committee Existence and Audit Committee Meeting Frequency on the External Audit: Perceptions of Australian Auditors

19 Pages Posted: 20 Jul 2007

See all articles by Jenny Stewart

Jenny Stewart

Griffith University - Griffith Business School

Lois Munro

Queensland University of Technology - QUT Business School

Abstract

This article examines the impact of audit committee existence, the frequency of audit committee meetings and the auditor's attendance at meetings on aspects of the external audit. Using an experimental design, we find that the audit committee, the frequency of committee meetings and the auditor's attendance at meetings are significantly associated with a reduction in perceived audit risk. The impact on audit efficiency and audit testing is perceived to be minimal. Manager and partner hours are greater when meetings are more frequent and the partner attends all meetings. The audit committee is expected to provide assistance in resolving conflicts with management and to lead to some improvement in overall audit quality. In neither case is this affected by meeting frequency or the auditor's attendance at meetings. Participants expect the existence of an audit committee to lead to an increase in audit fees, particularly when meetings are more frequent and the auditor is required to attend meetings. Reasons given for any fee increase relate to the additional preparation for and attendance at meetings.

JEL Classification: G34, M49, C93

Suggested Citation

Stewart, Jenny and Munro, Lois, The Impact of Audit Committee Existence and Audit Committee Meeting Frequency on the External Audit: Perceptions of Australian Auditors. International Journal of Auditing, Vol. 11, No. 1, pp. 51-69, March 2007, Available at SSRN: https://ssrn.com/abstract=1000073 or http://dx.doi.org/10.1111/j.1099-1123.2007.00356.x

Jenny Stewart (Contact Author)

Griffith University - Griffith Business School ( email )

Brisbane, Queensland 4111
Australia

Lois Munro

Queensland University of Technology - QUT Business School ( email )

GPO Box 2434
Brisbane, Queensland 4001
Australia

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