Audit Committee Effectiveness: Evidence from an Emerging Market Economy
2014
This paper examines the effectiveness of corporate governance in an emerging market economy, especially the role of audit committees in Saudi corporations from the perspective of audit committee members. Using a hybrid methodology that combines archival data of annual reports and survey data from audit committee members in 91 firms listed on the Saudi Arabian Capital Market Authority (SACMA) in 2011, we find that audit committee members are consistently more focused on performing selected general assigned and voluntary duties and less actively engaged in the mandatory oversight responsibilities over internal control and the quality of financial reporting process. The findings from this study suggest that there is an urgent need for continuing to develop audit standards and accounting regulations that are legally enforceable and easier to understand by the audit community in Saudi Arabia.
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