Audit committee and audit quality: An empirical analysis considering industry expertise, legal expertise and gender diversity

Journal article


Alhababsah, Salem and Yekini, Liafisu Sina 2021. Audit committee and audit quality: An empirical analysis considering industry expertise, legal expertise and gender diversity. Journal of International Accounting, Auditing and Taxation. https://doi.org/10.1016/j.intaccaudtax.2021.100377
AuthorsAlhababsah, Salem and Yekini, Liafisu Sina
Abstract

The extant literature and corporate governance regulations suffer from a tight focus on
audit committee (AC) financial expertise as a mean of improving the AC’s oversight
role. However, there is a lack of evidence about other kinds of expertise that might be
important for AC effectiveness which could contribute to the quality of financial
statements. This study examines whether AC industry expertise and AC legal expertise
have an impact on audit quality in a developing country (Jordan). Furthermore, mixed
and inconsistent findings regarding the role played by female directors and the
peculiarity of the Jordanian context creates a motive to examine the effect of AC
gender diversity on audit quality. By utilizing 1,035 firm-year observations, using two
proxies to capture audit quality, and employing different estimation methods, this study
highlights the importance of AC industry expertise in ensuring high audit quality. AC
legal expertise and AC gender diversity have no significant effect on audit quality. This
study offers a valuable contribution to the literature, and also has implications for
policy-makers in Jordan and other countries with similar institutional environments to
consider for future regulatory reform.

Keywordsaudit quality; industry experts; audit committee
Year2021
JournalJournal of International Accounting, Auditing and Taxation
PublisherElsevier
ISSN1061-9518
Digital Object Identifier (DOI)https://doi.org/10.1016/j.intaccaudtax.2021.100377
Web address (URL)http://hdl.handle.net/10545/625587
hdl:10545/625587
Publication dates20 Jan 2021
Publication process dates
Deposited05 Feb 2021, 12:10
Accepted06 Jan 2021
ContributorsCoventry University and University of Derby
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