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The effects of audit committee characteristics on its oversight effectiveness: Evidence from Hong Kong

Cheung, Kwok Yip; Adelopo, Ismail

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Authors

Kwok Yip Cheung

Ismail Adelopo Ismail.Adelopo@uwe.ac.uk
Professor in Accounting and Finance



Abstract

This study examines the relationships between audit committee (AC) characteristics and its oversight effectiveness primarily measured as accrual and real earnings management in Hong Kong after the Asian financial crisis in 2008 for a sample of Hong Kong Hang Seng Index between 2010 and 2015. Using a total of 1719 firm-year observations, we find that audit committee size is negatively associated with discretionary accruals, while the average age of the audit committee members is positively associated with discretionary accruals. The average age of the audit committee members is negatively associated with real earnings management while audit committee tenure and the number of audit committee meetings motivate managers to engage in real earnings management. The findings are useful to regulators in Hong Kong and to those with similar institutional and cultural environments and ownership structure.

Citation

Cheung, K. Y., & Adelopo, I. (2022). The effects of audit committee characteristics on its oversight effectiveness: Evidence from Hong Kong. Corporate Ownership and Control, 20(1), 8-18. https://doi.org/10.22495/cocv20i1art1

Journal Article Type Article
Acceptance Date Oct 12, 2022
Online Publication Date Oct 14, 2022
Publication Date 2022-10
Deposit Date Nov 1, 2022
Publicly Available Date Mar 28, 2024
Journal Corporate Ownership and Control
Print ISSN 1727-9232
Electronic ISSN 1810-3057
Publisher Virtus Interpress
Peer Reviewed Peer Reviewed
Volume 20
Issue 1
Pages 8-18
DOI https://doi.org/10.22495/cocv20i1art1
Keywords General Business, Management and Accounting, Accrual Earnings Management, Real Earnings Management, Audit Committees, Hong Kong, Asian Financial Crisis
Public URL https://uwe-repository.worktribe.com/output/10109200

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