Browsing by Subject "Accounting expertise"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Publication
    Open Access
    Audit Committee Competence and Earnings Management in Europe
    (Universidad de Murcia, Servicio de Publicaciones, 2022) Zarza Herranz, César; Reguera Alvarado, Nuria; López Iturriaga, Félix J.
    This study analyses the association between the competence of audit committee members and earnings management in a sample of 142 non-financial firms from France, Germany, Italy, Spain, and the United Kingdom over the 2006–2013 period. We measure members’ competence through their dedication and expertise. We find that outside directorships have a dual effect, such that a balanced level of dedication to the audit committee (roughly two outside directorships) reduces earnings management. We examine four types of expertise: audit, non-audit accounting, non-accounting financial, and supervisory expertise. We find a negative relation between earnings management and the audit experience of committee members, and that the other types of expertise play no relevant role. We also find that the contribution of audit experts to curbing earnings management proves particularly important in smaller and less active committees, as well as in smaller and busier boards.
  • Thumbnail Image
    Publication
    Open Access
    Does audit committee financial expertise actually improves information readability?
    (Universidad de Murcia, Servicio de Publicaciones, 2022) Alcaide-Ruiz, María Dolores; Bravo-Urquiza, Francisco
    This paper investigates the relationship between audit committee financial expertise, particularly considering specific accounting financial expertise, and the readability of management reports. Additionally, this study also examines whether the effect of financial experts is moderated by the intensity of the audit committee’s activity. The dataset for directors’ characteristics is hand-collected as are the management reports. The sample is composed of Spanish listed firms for the period 2013-2015. The results show a negative association between financial expertise, especially accounting financial expertise, and the readability of management reports. In addition, this association is accentuated with higher number of audit committees’ meetings. This evidence stimulates the debate on the advantages of having members with financial expertise in the audit committee. Otherwise, the use of contextual approaches in further studies regarding the role of directors is recommended. In addition, this could help regulators and professionals to guide their requirements and recommendations about directors’ qualifications.