The Audit Committee: Management Watchdog or Personal Friend of the CEO?

• 成果类型: Article
• 署名作者: Bruynseels, Liesbeth; Cardinaels, Eddy
• 署名单位: KU Leuven; Tilburg University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-50601
• 发表日期: 2014
• 页码: 113-145
• 关键词: nonaudit service fees; corporate governance; INTERNAL CONTROL; Sarbanes-Oxley; earnings; INDEPENDENCE; BOARD; DIRECTORS; QUALITY; CONSEQUENCES

摘要

To ensure that audit committees provide sufficient oversight over the auditing process and quality of financial reporting, legislators have imposed stricter requirements on the independence of audit committee members. Although many audit committees appear to be fully'' independent, anecdotal evidence suggests that CEOs often appoint directors from their social networks. Based on a 2004 to 2008 sample of U.S.-listed companies after the Sarbanes-Oxley Act, we find that these social ties have a negative effect on variables that proxy for oversight quality. In particular, we find that firms whose audit committees have friendship'' ties to the CEO purchase fewer audit services and engage more in earnings management. Auditors are also less likely to issue going-concern opinions or to report internal control weaknesses when friendship ties are present. On the other hand, social ties formed through advice networks'' do not seem to hamper the quality of audit committee oversight.