NON-EXECUTIVE DIRECTORS AND AUDIT COMMITTEE: A STUDY ON THEIR AUTHORITY AND EFFECTIVENESS

Download This Article

Abstract

This study aimed to investigate the perceptions of senior managers of Malaysian publicly listed companies on issues relating to audit committee authority and effectiveness. Questionnaire survey technique was employed to seek the respondents perceptions on seven issues, namely audit committee appoints the auditor, audit committee determines and reviews audit fees, audit committee determines and reviews the auditor’s scope and duties, and audit committee’s reports, meetings, charter and roles. The majority of respondents agreed that auditor would be more effective and independent if audit committee assumed the responsibility to appoint the auditor, determine and review the audit fees, and determine and review the external auditor’s scope and duties. It is also found that disclosure of audit committee report, quarterly meeting and disclosure charter in annual report would enhance the perceptions of users of financial statement concerning the effectiveness of the committee.

Keywords: Authority, Effectiveness, Perceptions, Malaysia, Survey

How to cite this paper: Muhamad Sori, Z., Abdul-Hamid, M. A., Mohd Saad, S. S., & Evans, J. G. (2008). Non-executive directors and audit committee: a study on their authority and effectiveness. Corporate Ownership & Control, 5(2-2), 296-305. https://doi.org/10.22495/cocv5i2c2p6