On the Demand for Independent and Active Audit Committees
Journal of Corporate Finance
Posted: 25 Jul 2000
We study the role of the board by focusing on the composition and activity of the audit committee for a sample of 1,150 firms in 1998. Employing several proxies for the demand for accounting certification we find that those firms likely to demand greater certification are also those most likely to have completely independent and active audit committees. Specifically, we find that the probability of having a completely independent and active audit committee is positively related to firm size and leverage and negatively related to the level of firm growth opportunities and managerial ownership. Our findings are consistent with audit committee composition and activity being related to the demand for accounting certification.
Note: This is a description of the article and not the actual abstract.
JEL Classification: G32, M49, D23
Suggested Citation: Suggested Citation