Date of Award

1980

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Accounting

Abstract

Changes in the economy have brought about attempts to improve the structure of the corporate organization and the quality of corporate financial reporting. One such attempt has been to increase the responsibilities of corporate boards of directors, and subcommittees to handle specific duties of the board have been established. The audit committee is one of these subcommittees and is now required for all companies listed on the New York Stock Exchange. The corporate audit committee should make a significant contribution toward improving the integrity and credibility of financial statements and the overall corporate image in the public sector. To accomplish this goal, the audit committee must aid in preserving external auditory independence in both appearance and in fact. In addition, the committee should add stature and importance to the internal audit function. Audit committees and their objectives, responsibilities and functions will have an impact on all segments of the business community. To date, however, there has been no clear delineation of these objectives, responsibilities and functions. The SEC, the New York Stock Exchange, the AICPA, Congress and others have consistently supported the establishment of audit committees, but no minimum standards of performance have been instituted. The purpose of this study was to determine the functions that should be performed by audit committees as perceived by three groups: audit committee members, CPA firm audit partners, and a financial statement user group composed of financial analysts and bankers. Differences in opinions among these groups were identified. A determination of the effectiveness of current audit committee performance as perceived by audit committee members and CPA firm audit partners was also made. Again, differences in opinions between groups were identified. Also, an attempt was made to determine the characteristics of audit committees that were currently functioning effectively. Data were collected by mail questionnaires. Appropriate statistical tests were used to evaluate the responses. According to survey results, the differences in opinions of the three groups were statistically significant for most of the audit committee functions presented for consideration. Most of these differences, however, were caused by the extent of agreement indicated by the respondents. The groups were generally uniform in the belief that current audit committee performance is effective and future performance of some set of minimum duties is desirable. Audit committees can be an integral part of the corporate organization if the effectiveness of their performance is adequate to meet the expectations of the business community and the general public.

Pages

172

DOI

10.31390/gradschool_disstheses.3512

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