CORPORATE GOVERNANCE AND AUDIT QUALITY: FURTHER RECOMMENDATIONS BEYOND THE CODE

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Abstract

Although meeting the recommendations of corporate governance code is important, it is not sufficient to ensure the governance effectiveness (often having more form than substance). This, alongside with the fact that the Jordanian corporate governance code is still in its infancy, motivates the study to look beyond the current code recommendations. For this purpose, this study seeks views of key practitioners regarding possible additions/changes to the current code that they feel are important in promoting audit quality. Questionnaire survey is used to obtain views of the auditors, boards of directors and audit committees’ members of the Jordanian listed companies. A number of important recommendations have been put forward by the respondents. The study has an implication for policymakers by providing useful inputs for future governance reform. Also, the study provides insights to companies that are interested in corporate governance quality. The important information gained from the key respondents no doubt contributes to the literature and also opens new avenues for future research. This study offers an important contribution by extending the investigation of boards of directors’ and audit committees’ roles in promoting audit quality to dimensions that are not recommended in the current governance code, and also widely neglected in the literature.

Keywords: Board of Directors, Audit Committee, Audit Quality, Corporate Governance

Received: 05.11.2017

Accepted: 20.12.2017

JEL Classification: M41, M42, G34, N45

How to cite this paper: Alhababsah, S. (2018). Corporate governance and audit quality: Further recommendations beyond the code. Corporate Ownership & Control, 15(2), 8-18. https://doi.org/10.22495/cocv15i2art1