Audit committee, board characteristics and quality of fi nancial reporting: An empirical research on Chinese securities market

Abstract

Board independence and the board’s expertise characteristics are key factors influencing the quality of financial reporting. Companies, having a higher percentage of independent directors, having independent financial directors, or having an audit committee on board are more likely to generate quality accounting earnings information. Variables representing board behavior characteristics, namely, ratio of shares owned by the board, board meeting frequency within a year, and the number of independent directors holding posts concurrently in the controlling shareholder s company, are not significantly related to the quality of financial reporting. Board meeting frequency is even abnormally negatively related to the quality of financial reporting.

Keywords

independent director institution, imposed changes, board characteristics, quality of financial reporting