Governance characteristics and role effectiveness of audit committees

Steven Dellaportas, Philomena Leung, Barry J. Cooper, Akeel M. Lary, Dennis W. Taylor

Research output: Journal PublicationArticlepeer-review

55 Citations (Scopus)


This paper examines the association between audit committee (AC) governance characteristics and their role effectiveness. Its objective is to contribute a more comprehensive model and new evidence from Australia that complements and extends recent studies from different country settings on characteristics, roles and effectiveness of ACs. The sampling frame is Australian listed companies, over the years 2004 to 2009, consisting of 180 observations. The study applies multiple regressions to validate the hypotheses and models. Results reveal that stronger AC independence and competence, but not diligence, is significantly related to a lower incidence and severity of financial restatements (i.e. to a higher integrity of financial statements). However, greater AC diligence, but not independence or competence, is significantly related to lower non-audit fee ratio (i.e. to higher external auditor independence). The paper highlights salient links between an AC's governance characteristics and its effectiveness in fulfilling certain governance roles. Also it expands current literature by presenting a comprehensive empirical model along with statistical measures for AC governance characteristics. Previous studies have not drawn AC governance characteristics together in a comprehensive model or provided evidence beyond the North American and European setting. A further original feature is the measurement of AC competence in terms of collective members' combined financial sophistication and industry knowledge.

Original languageEnglish
Pages (from-to)336-354
Number of pages19
JournalManagerial Auditing Journal
Issue number4
Publication statusPublished - 13 Apr 2012
Externally publishedYes


  • Audit committee characteristics
  • Audit committee effectiveness
  • Audit committees
  • Auditor independence
  • Australia
  • Corporate governance
  • Financial restatements
  • Non-audit fees

ASJC Scopus subject areas

  • Accounting
  • General Economics,Econometrics and Finance
  • General Business,Management and Accounting


Dive into the research topics of 'Governance characteristics and role effectiveness of audit committees'. Together they form a unique fingerprint.

Cite this