Voluntary Audit Committee Formation and Practices Among Belgian Listed Companies

16 Pages Posted: 16 Oct 2004

See all articles by Marleen Willekens

Marleen Willekens

Katholieke Universiteit Leuven (KUL)

Heidi Vander Bauwhede

Katholieke Universiteit Leuven; Vlerick Leuven Gent Management School - Department of Accounting & Finance

Ann Gaeremynck

KU Leuven

Abstract

In this paper we investigate some factors that are associated with voluntary audit committee formation in a non-Anglo-Saxon environment (and where audit committee formation is voluntary, even for listed companies). For those companies that voluntarily instaled an audit committee we also present evidence on their working practices. We use data from Belgian listed companies for that purpose. Consistent with previous Anglo-Saxon research, we find that voluntary audit committee formation is positively correlated with the proportion of independent directors on the board of directors and external audit-firm size. Contrary to prior studies, we do not find that agency costs and board size are associated with voluntary audit committee formation. As to working practices, we find that a substantial amount of Belgian-listed companies do not comply with the recommendations of the Brussels Stock Exchange regarding audit committees, as about 50% of these companies has no audit committee. Those companies that do have an audit committee perform quite well according to the Belgian recommendations, but not according to recently formulated (tougher) US requirements, as they typically do not include a financial expert nor disclose the audit committee charter.

JEL Classification: G34, M41, M49

Suggested Citation

Willekens, Marleen and Vander Bauwhede, Heidi J. C. and Gaeremynck, Ann, Voluntary Audit Committee Formation and Practices Among Belgian Listed Companies. Available at SSRN: https://ssrn.com/abstract=605161

Marleen Willekens (Contact Author)

Katholieke Universiteit Leuven (KUL) ( email )

Naamsestraat 69
B-3000 Leuven
Belgium

Heidi J. C. Vander Bauwhede

Katholieke Universiteit Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant
Belgium

Vlerick Leuven Gent Management School - Department of Accounting & Finance ( email )

Belgium

HOME PAGE: http://www.vlerick.be/research/db/search.cfm?menu1=709

Ann Gaeremynck

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant B-3000
Belgium
3216326921 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
26
Abstract Views
1,689
PlumX Metrics