TY - JOUR

T1 - Impact of audit committees with independent financial experts on accounting quality

T2 - An empirical analysis of the German capital market

AU - Velte, Patrick

AU - Stiglbauer, Markus

PY - 2011

Y1 - 2011

N2 - This paper presents the findings from a study, based on the annual reports' analysis of German corporations listed in the DAX30, TecDAX, MDAX and SDAX, that investigates whether the implementation of audit committees and independent members with financial expertise leads to higher accounting quality (lower earnings management and accounting errors). The analysis of regressions conducted states a significant negative link between the independence and financial expertise of its members, earnings management and accounting errors. Significant results cannot be achieved if less than 50% of the audit committee members are independent financial experts.

AB - This paper presents the findings from a study, based on the annual reports' analysis of German corporations listed in the DAX30, TecDAX, MDAX and SDAX, that investigates whether the implementation of audit committees and independent members with financial expertise leads to higher accounting quality (lower earnings management and accounting errors). The analysis of regressions conducted states a significant negative link between the independence and financial expertise of its members, earnings management and accounting errors. Significant results cannot be achieved if less than 50% of the audit committee members are independent financial experts.

KW - Management studies

KW - Audit committees

KW - Corporate governance research

KW - Financial expertise

KW - Independence

UR - http://www.scopus.com/inward/record.url?scp=84891872886&partnerID=8YFLogxK

M3 - Journal articles

VL - 9

SP - 17

EP - 33

JO - Problems and Perspectives in Management (PPM)

JF - Problems and Perspectives in Management (PPM)

SN - 1727-7051

IS - 4

ER -