TY - JOUR
T1 - The roles, responsibilities and characteristics of audit committee in China
AU - Lin, Z. Jun
AU - Xiao, Jason Z.
AU - Tang, Qingliang
N1 - Copyright:
Copyright 2008 Elsevier B.V., All rights reserved.
PY - 2008
Y1 - 2008
N2 - Purpose - The purpose of this paper is to investigate the perceptions of the roles, responsibilities and basic characteristics of audit committees (ACs) in the current business environment in China, from the perspectives of investors/creditors, independent directors (AC members), company officers and auditors. Design/methodology/approach - The study is conducted through a questionnaire survey of the four groups of stakeholders with two forms of survey instruments being distributed to randomly selected survey subjects. The data collected from the returned questionnaires are analyzed at both the aggregate and sub-sample levels. Findings - The study finds that various groups of stakeholders have generally accepted the ceremonial roles and responsibilities of ACs in terms of lifting the image of good corporate governance, enhancing communication between board of directors (BoD) and auditors, and mediating conflict between management and auditors. However, the more concrete AC oversight roles and responsibilities for improving internal control, rules compliance, sound corporate financial reporting and auditing processes have not been fully recognized at present, particularly by company management and independent directors. In addition, the study reveals that actual AC operations in practice are ineffective even though a large portion of Chinese listed companies have set up ACs. Originality/value - The paper should assist readers to understand the recent development of corporate governance and stock market reforms in China and generate some policy implications that can be applied to other countries as well, emerging economies in particular.
AB - Purpose - The purpose of this paper is to investigate the perceptions of the roles, responsibilities and basic characteristics of audit committees (ACs) in the current business environment in China, from the perspectives of investors/creditors, independent directors (AC members), company officers and auditors. Design/methodology/approach - The study is conducted through a questionnaire survey of the four groups of stakeholders with two forms of survey instruments being distributed to randomly selected survey subjects. The data collected from the returned questionnaires are analyzed at both the aggregate and sub-sample levels. Findings - The study finds that various groups of stakeholders have generally accepted the ceremonial roles and responsibilities of ACs in terms of lifting the image of good corporate governance, enhancing communication between board of directors (BoD) and auditors, and mediating conflict between management and auditors. However, the more concrete AC oversight roles and responsibilities for improving internal control, rules compliance, sound corporate financial reporting and auditing processes have not been fully recognized at present, particularly by company management and independent directors. In addition, the study reveals that actual AC operations in practice are ineffective even though a large portion of Chinese listed companies have set up ACs. Originality/value - The paper should assist readers to understand the recent development of corporate governance and stock market reforms in China and generate some policy implications that can be applied to other countries as well, emerging economies in particular.
KW - Audit committees
KW - China
KW - Corporate governance
KW - Non-executive directors
KW - Stock markets
UR - http://www.scopus.com/inward/record.url?scp=46349106793&partnerID=8YFLogxK
U2 - 10.1108/09513570810872987
DO - 10.1108/09513570810872987
M3 - Journal article
AN - SCOPUS:46349106793
SN - 0951-3574
VL - 21
SP - 721
EP - 751
JO - Accounting, Auditing and Accountability Journal
JF - Accounting, Auditing and Accountability Journal
IS - 5
ER -