| Audit
Committee Structural Features and Impact on Underpricing: Empirical Analysis of
Singapore IPOs from 1997-2004
-- J-L W Mitchell
Van der Zahn,
Harjinder Singh and Inderpal Singh
The
first objective of this paper is to examine the association between Audit Committee
(AC)structural features and the level of underpricing using a sample of 322 Singapore
Initial Public Offerings (IPOs) listing on the Stock Exchange of Singapore (SGX)
between1997-2004. The second objective is to determine if associations between
AC structural features and underpricing changed before, during and after implementation
of new corporate governance regulations. Of six AC structural features examined,
the authors find only a consistent positive and significant association between
underpricing and IPOs with ACs comprising at least one independent director with
accounting qualifications and professional credentials. Associations between underpricing
and other AC structural features were either insignificant, or only moderately
significant in isolated cases. Across the time, the authors find weak empirical
support for the view that the association between AC structural features and underpricing
intensified as corporate governance regulations related to ACs and their composition
strengthened. Overall, they conclude investors place limited if any significance
to AC structural features when determining their strike price for an IPO's stock.
As AC structural characteristics appear to have little (or nil) effect on lowering
an IPO's cost of capital, the findings do not support some policymakers arguments
for the introduction of mandated uniform AC structures. Rather, the results support
an efficient contracting view that implies firms should have flexibility to determine
the AC structure on an individual basis to enable the optimal selection of monitoring
mechanisms. ©
2006 IUP . All Right Reserved.
A
Study of Audit Committee Requirements and Compliance: The Malaysian Experience
-- Zulkarnain Muhamad Sori and Yusuf Karbhari
This
paper investigates the compliance of audit committee requirements among Malaysian
public listed companies. Three issues are analyzed: Independence of audit committee;
audit committee meetings; audit committee report. The discussion focuses on the
aspects of composition, independence, chairperson and reporting of the committee
in the company's annual report. These factors were considered important by Malaysian
regulators with the aim to promote better corporate governance, transparency,
efficiency in the capital market activities, and to strengthen investor protection
and confidence. ©
2006 IUP . All Right Reserved.
Audit
Committees, Boards and the Quality of Reported Earnings
-- Nikos Vafeas
To
study the relationship between audit committees and boards of directors with financial
reporting quality data on 252 US firms between 1994-2000 is employed in this paper.
Several changes in committee and board profile during the sample period have been
documented. Results from logistic regressions suggest that measures of audit committee
and board structure are related to earnings quality in a manner that is generally
consistent with the predictions of agency theory. This study contributes to extant
knowledge by employing different earnings quality measures from prior studies,
and by expanding the range of audit committee attributes deemed important in determining
audit committee performance. ©
2005 Canadian Academic Accounting Association.This article was earlier published
in the Contemporary The IUP Journal of Accounting Research Association, Vol. 22, No. 4, 2005.
Reprinted with permission.
Audit
Expectation Gap: The Concept
-- Mahdi Salehi and
K Nanjegowda
Audit
expectation gap is an important issue which is discussed mostly as part of accounting
revolution in the modern era. The audit expectation gap is the difference between
beliefs of financial statement users and performance of accountants and auditors
who prepare audits. Experts view that this gap can be minimized only if the auditors
take responsibility of the certification of financial statements, and further
gauge the early warnings of business fraud. This study concludes that audit expectation
gap results due to the deficiencies of auditor, auditor independence, audit process,
regulatory mechanism and the society at large. ©
2006 IUP . All Right Reserved. | 
