Research On The Independence Of Audit Committee Of Listed Companies In China

At present, the condition of supervision and governance on security market is not satisfying. Especially the financial information distortion and the increasing number of cases on damaging the interest of minority shareholders, which disturbed the order of security market, damaged the interest of shareholders and affected the development of security market in China. These cause people has suspicious to the corporate governance, especially to the audit committee system. But we should realize that the system itself has not any mistake, the key to the point is that the audit committee is whether independent. If the audit committee is not independent, it's function is impossible to have the effective effect.This paper carries on a positive research to the relationship between the independence of audit committee and quality of information disclosure with 202 China's companies listed on the market in Shenzhen exchange A between 2003-2005.This paper define the concept of independence from the point of the independence of the management; and introduce a large number of variables such as independent director's proportion, the personnel proportion holds the duty in this company or the connection enterprise , the personnel proportion receiving the allowance in audit committee and the average allowance amount receiving in audit committee during the qualitative research on the dependence of audit committee and quality of information disclosure. In result, this paper find that between the four variables effort the independence of audit committee, it is only the personnel proportion receiving the allowance in audit committee has remarkable dependence with the quality of information disclosure, another three variables as independent director's proportion, the average allowance amount receiving in audit committee and the personnel proportion holds the duty in this company or the connection enterprise have no remarkable independence with the quality of information disclosure, or have little weak relation.According to the result of study, this paper analysis the main reasons, proposes some new ideas on improving independent director's proportion in audit committee, reforming independent director's salary system in audit committee, defining provisions about the independence of audit committee and the establishment of disclosure mechanism of audit committee.