On the Demand for Independent and Active Audit Committees
28 Pages Posted: 23 Apr 2005
Date Written: May 2000
We focus on the importance of audit committees in the contracting process. We find that the demand for independent and active audit committees increases with proxies capturing the demand for accounting certification. Specifically, the likelihood of a firm having a completely independent and active audit committee is negatively related to firm growth opportunities and managerial ownership and positively related to firm size and leverage.
Keywords: Accounting Certification, Audit Committee, Outside Directors
JEL Classification: G34, L14, M41
Suggested Citation: Suggested Citation