Firm characteristics and the voluntary formation of audit committees by non-top 500 firms listed on the ASX

Li Chen, Alan Kilgore, Renee Radich

Research output: Chapter in Book/Report/Conference proceedingConference proceeding contribution

Abstract

In Australia, while only the Top 500 firms listed on the Australian Stock Exchange (ASX) are required to form audit committees, many Non-Top 500 firms still voluntarily establish audit committees. Why these firms do so is the subject of this paper. Specifically, this study examines the association between firm specific characteristics and the voluntary formation of audit committees by Non-Top 500 firms listed on the ASX. Several specific firm characteristics are expected to be associated with the voluntary formation of audit committees by Non-Top 500 firms listed on the ASX. Based on a sample of 224 Non-Top 500 firms listed on the ASX, the results of this study find that firm size and board size are positively associated with the voluntary formation of audit committees. In addition, higher levels of leverage, an independent Chairman of the Board and a higher proportion of independent directors on the Board provide incentives for Non-Top 500 firms listed on the ASX to voluntarily form audit committees.
Original languageEnglish
Title of host publication2009 AFAANZ Conference
Subtitle of host publicationpapers
Place of PublicationCarlton, Vic.
PublisherAccounting and Finance Association of Australia and New Zealand
Number of pages32
Publication statusPublished - 2007
EventAccounting and Finance Association of Australia and New Zealand Conference (2007) - Gold Coast, Qld.
Duration: 1 Jul 20073 Jul 2007

Conference

ConferenceAccounting and Finance Association of Australia and New Zealand Conference (2007)
CityGold Coast, Qld.
Period1/07/073/07/07

Keywords

  • audit committees
  • firm specific factors
  • corporate governance

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