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Research On The Effectiveness Of Audit Committee System Of Chinese Listed Corporations

Posted on:2008-04-20Degree:MasterType:Thesis
Country:ChinaCandidate:X P ZhangFull Text:PDF
GTID:2189360215979942Subject:Accounting
Abstract/Summary:PDF Full Text Request
As a significant system to perfect the structure of modern corporate governance, audit committee plays a positive role in improving the quality of finance information and protecting the investors'benefit. According to its inherent characteristics and its efficiency being on developed capital market in the west, Chinese government began to introduce audit committee system since 2002, in order to promote the corporate governance reform of Chinese listed corporations. With the establishment and development of audit committee system in our country, its operation and effectiveness have drew attention extensively. By studying on the effectiveness of audit committee system thoroughly, this paper intends to lay a theoretical foundation and put forward some policy recommendations to improve the audit committee system of our listed corporations. Based on a review of studies around the world, firstly, this paper theoretically analyses audit committee system and its effectiveness, it also emphatically studies the internal composition and characteristics of audit committee, as well as their influence on the effectiveness. This theoretical analysis points out, the effectiveness of audit committee system lies in perfecting the corporate governance structure and improving the quality of financial information, by taking its responsibilities which are supervising, controlling, communicating and reporting. A effective audit committee requires notable independence, professional competent abilities, rational working rules, sedulity and appropriate size. Secondly, this paper empirically examines the effectiveness of Chinese audit committee system, using the relevant data from Chinese listed corporations. The results indicate that to a certain extent the audit committee characteristics, such as independence, professional ability, authority and size, have a positive effect on the quality of financial information. It means that audit committee system in China has indeed taken certain responsibilities as it is expected by the government, but its active function is not yet brought into play completely. Finally, this paper proposes five policy recommendations, in order to improve the effectiveness of Chinese audit committee system, and perfect the corporate governance structure of our listed corporations.
Keywords/Search Tags:Audit committee, Effectiveness, Responsibility, Characteristic, Quality of financial information
PDF Full Text Request
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