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a Dr Murya Habbash
b Dr Ehsan Al-Moataz
DETERMINANTS OF AUDIT COMMITTEE EFFECTIVENESS :
In listed firms
ABSTRACT
This paper provides empirical evidence that audit committee effectiveness is associated with economic factors, audit committee effectiveness increases with board independence and board diligence and decreases with the firm's leverage and state ownership. Moreover, there are a positive association between audit committee effectiveness and audit quality and large firm size. At the same time, a substitution effect is observed among internal control mechanisms, ownership types and audit committee effectiveness. Audit committee effectiveness increases with the supply of active and independent directors and with the demand for monitoring, and decreases with the availability of substitute monitoring mechanisms.
Keywords: Audit committee effectiveness, Economic factors, Board independence and diligence, State ownership, Internal control mechanisms, ownership type, Demand for monitoring, Monitoring mechanisms.
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