How Audit Committee Chairs Address Information-Processing Barriers

• 成果类型: Article
• 署名作者: Free, Clinton; Trotman, Andrew J.; Trotman, Ken T.
• 署名单位: University of Sydney; Northeastern University; University of New South Wales Sydney
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/tar-2018-0379
• 发表日期: 2021
• 页码: 147-169
• 关键词: members professional skepticism; GROUP DECISION-MAKING; GROUP-PERFORMANCE; quality insights; judgment rule; ELABORATION; teams; governance; diversity; DIRECTORS

摘要

This study investigates the way that experienced audit committee Chairs address barriers to effective performance. We conceptualize audit committees as groups of individuals gathering, elaborating, and sharing information, and identify key group barriers to effective audit committee oversight. Drawing on 24 interviews with audit committee Chairs from leading Australian-listed companies, we provide new evidence of the approaches used in practice to address information-processing barriers faced by audit committees. Specifically, we identify six key mechanisms: (1) audit committee composition; (2) pre-meetings; (3) handling of disagreements between management and auditors; (4) formal audit committee meeting facilitation; (5) promoting audit committee skepticism; and (6) external auditor selection. Our findings provide insights for audit committee members, audit partners, and policy-makers as they aim to improve financial reporting and audit quality. These findings also have important implications for research designs of future experimental research.