Audit Committee Financial Expertise, Audit Committee Independence, and Regulatory Oversight on External Auditors

Mohammad Javad Saeia, Reza Hesarzadeh* (Corresponding Author), Naser Makarem, Saher Aqelc

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

We empirically investigate how regulatory oversight on external auditors is jointly influenced by audit committee financial expertise and independence. To measure regulatory oversight on external auditors, we use comment letters issued by the Securities and Exchange Organization of Iran. We show that audit committee financial expertise increases (decreases) regulatory oversight on external auditors when audit committee independence is low (high). We further show that this interactive effect is stronger under higher regulatory reviewers’ workload compression. Collectively, our findings suggest that, first, financial expertise and independence of audit committees should be analyzed together as independence moderates the benefit of financial expertise. Second, the consideration of regulatory reviewers’ workload compression is important in this analysis.
Original languageEnglish
Number of pages29
JournalSpanish Journal of Finance and Accounting
Early online date12 Dec 2022
DOIs
Publication statusE-pub ahead of print - 12 Dec 2022

Keywords

  • Audit committeee
  • external auditor
  • regulatory oversight

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