Date of Degree
Audit Committee Member; Financial Reporting Quality
Prior studies investigating the selection of audit committee members (ACMs) often focus on board-level and director demographic characteristics. In this paper, I investigate whether boards select new ACMs from corporate environments with similar financial reporting quality. Using the appointee firm's financial report quality as a proxy for new ACMs' financial reporting attributes, I find that firms are more likely to appoint new ACMs with financial reporting attributes similar to firms' financial reporting culture for a sample of 275 new ACM appointments from 2007 to 2011. I find that firms appointing ACMs with relatively weak (strong) financial reporting attributes are more likely to have decreased (increased) subsequent financial reporting quality. I also find that firms appointing ACMs with relatively weak financial reporting attributes suffer more deterioration on their subsequent financial reporting quality when their financial reporting culture are more different from the ACMs' financial reporting attributes.
Lei, Dongliang, "The Role of Financial Reporting Quality in the Selection of New Audit Committee Member" (2015). CUNY Academic Works.