Audit committees and earnings quality

Baxter, Peter and Cotter, Julie (2009) Audit committees and earnings quality. Accounting and Finance, 49 (2). pp. 267-290. ISSN 0810-5391

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This research investigates whether audit committees are associated with improved earnings quality for a sample of Australian listed companies prior to the introduction of mandatory audit committee requirements in 2003. Two measures of earnings quality are used based on models first developed by Jones (1991) and Dechow and Dichev (2002). Our results indicate that formation of an audit committee reduces intentional earnings management but not accrual estimation errors. We also find differences in the associations between audit committee accounting expertise and the two earnings quality measures. Other audit committee characteristics examined are not significantly related to either earnings quality measure.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Author's version deposited in accordance with the copyright policy of the publisher.
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 10 Nov 2009 01:52
Last Modified: 02 Jul 2013 23:19
Uncontrolled Keywords: audit committees; corporate governance; earnings management; earnings quality
Fields of Research : 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150103 Financial Accounting
15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150102 Auditing and Accountability
14 Economics > 1403 Econometrics > 140303 Economic Models and Forecasting
Socio-Economic Objective: B Economic Development > 91 Economic Framework > 9199 Other Economic Framework > 919999 Economic Framework not elsewhere classified
B Economic Development > 90 Commercial Services and Tourism > 9002 Property, Business Support Services and Trade > 900201 Administration and Business Support Services
Identification Number or DOI: 10.1111/j.1467-629X.2008.00290.x

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