The Right Person at the Right Time: Audit Committee Members and the Quality of Financial Information

Forthcoming in Universia Business Review

18 Pages Posted: 23 Aug 2018

See all articles by César Zarza-Herranz

César Zarza-Herranz

University of Valladolid

Félix J. López-Iturriaga

University of Valladolid - Department of Financial Economics and Accounting; National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy

Nuria Reguera

University of Seville

Date Written: August 13, 2018

Abstract

We analyze some personal characteristics of the members of the audit committee of the Spanish listed firms and the relation between these characteristics and earnings management. We find a non-linear relation with tenure, so that long tenures can initially compromise the directors’ independence but, after a given threshold, longer tenures improve the expertise of the members. Serving in too many boards has a negative influence on the ability of directors to detect earnings management, and higher academic background and more diverse professional background improve the directors’ abilities.

Keywords: Audit Committee, Auditing, Corporate Governance, Earnings Management, Expertise

JEL Classification: M42, G34

Suggested Citation

Zarza-Herranz, César and Lopez-Iturriaga, Felix Javier and Reguera, Nuria, The Right Person at the Right Time: Audit Committee Members and the Quality of Financial Information (August 13, 2018). Forthcoming in Universia Business Review. Available at SSRN: https://ssrn.com/abstract=3230331

César Zarza-Herranz

University of Valladolid ( email )

8 C/Plaza de Santa Cruz
Valladolid, Valladolid 47002
Spain

Felix Javier Lopez-Iturriaga (Contact Author)

University of Valladolid - Department of Financial Economics and Accounting ( email )

Avda. Valle Esgueva 6
47011 Valladolid
Spain
+34 983 184 395 (Phone)
+34 983 183830 (Fax)

HOME PAGE: http://www2.eco.uva.es/flopez

National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy ( email )

Lebedeva,27
Perm, Perm 614070
Russia

Nuria Reguera

University of Seville ( email )

Avda. del Cid s/n
Sevilla, Sevilla 41004
Spain

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