Is Audit Quality Higher when Audit Committees Report Strong Oversight?

12 Pages Posted: 17 Mar 2023 Last revised: 10 May 2023

See all articles by Brian Bratten

Brian Bratten

University of Kentucky - Von Allmen School of Accountancy

Monika Causholli

University of Kentucky - Von Allmen School of Accountancy

Valbona Sulcaj

University of Texas at El Paso - Department of Accounting & Information Systems

Date Written: May 2023

Abstract

This article provides a summary of recent research by Bratten, Causholli, and Sulcaj (2022) who examine whether issuers with audit committees who report strong oversight over the audit function have higher audit quality. Using a novel dataset from Audit Analytics that summarizes reported audit committee activities, Bratten et al. (2022) create a composite measure that captures the strength of the audit committee’s oversight of the audit process. The study uses several measures to capture audit quality, including audit fees, discretionary accruals, and propensity to meet or just beat earnings benchmarks. The authors show that when issuers’ audit committees report activities consistent with being more active in overseeing the external auditor, issuers, on average, have better audit quality.

Keywords: audit committee, auditor oversight, audit quality, audit committee disclosures

Suggested Citation

Bratten, Brian and Causholli, Monika and Sulcaj, Valbona, Is Audit Quality Higher when Audit Committees Report Strong Oversight? (May 2023). Available at SSRN: https://ssrn.com/abstract=4387707 or http://dx.doi.org/10.2139/ssrn.4387707

Brian Bratten (Contact Author)

University of Kentucky - Von Allmen School of Accountancy ( email )

Lexington, KY 40506
United States
859-257-1947 (Phone)

HOME PAGE: http://gatton.uky.edu/faculty-research/departments/von-allmen-school-accountancy/directory

Monika Causholli

University of Kentucky - Von Allmen School of Accountancy ( email )

Lexington, KY 40506
United States

Valbona Sulcaj

University of Texas at El Paso - Department of Accounting & Information Systems ( email )

College of Business Administration
500 West University Avenue
El Paso, TX 79968
United States

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