||Audit Committee Scholar Members and Accrual Quality
||Department of Accountancy
After a number of major accounting scandals, audit committees are now expected to be the major corporate governance mechanism to ensure the quality of financial reporting. In this study, I examine whether scholars with high educational attainment, ethics, and reputation are well-suited to serve on audit committees to enhance oversight of management and thus improve financial reporting since the composition of audit committee attributes its effectiveness. Since different fields of study affect individuals in different way, I conjecture that that the educational specializations of scholars may influence their abilities as audit committee directors to oversee management. In addition, I propose that the reputations of the universities that scholars who are members of audit committees work for impact their monitoring behavior. I find that firms with scholars serving as members of their audit committees have better accrual quality than those without such individuals on their committees. Besides, scholars with business related and medical specializations seem to demand better accrual quality compared to those with other educational specializations. Furthermore, audit committee scholar members from higher ranking schools are more effective in limiting earnings management than those from lower ranking institutions.
I. INTRODUCTION 1
II. LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT 7
III. RESEARCH DESIGN AND EMPIRICAL MODELS 11
IV. EMPIRICAL RESULTS 22
V. CONCLUSIONS 65
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