Study Of The Effectiveness Of The Audit Committee

As a significant system to perfect the structure of modern corporate governance, audit committee plays a positive role in improving the quality of financial information and protecting the investors' interests. With the establishment and development of audit committee system in China, its operation and effectiveness have been drew attention extensively. On the effectiveness of the implementation about audit committee system, there exist many research results in China and other countries, but there is no research based on the disclosed information of audit committee. While the audit committee playing a supervisory role, it was also supervised. So there need sufficient and fair information disclosure. In this dissertation, the author researches effectiveness of audit committee based on information disclosure.The study begins with the audit committee system. Especially it's system of information disclosure. Compares with the history and current situation of audit committee system, the author find its shortage. Then based on a review of studies around the world, discussed the conditions which audit committee function effectively from the interior and external environment, and put forward an evaluation system of audit committee's effectiveness. Come to a conclusion, an effective audit committee requires notable independence, professional competent abilities, rational working rules, sedulity and appropriate size. Following I analysis the relationship between the disclosure and effectiveness of audit committee, and studied it from the economic angle of the information disclosure's mechanism, thought its theoretical basis is the principal-agent theory, and information disclosure is effective mechanism that shareholders ensure audit committee fulfills its fiduciary duty fully. The paper empirically examines the effectiveness of Chinese audit committee system, using the relevant data from Chinese listed corporations.By the descriptive statistical analysis about current situation of the audit committee's information disclosure, I came to conclusions: With the audit committee developing in china, the information disclosure system of audit committee improvement day by day. But it still have defect. In China, the purpose of audit committee information disclosure is not clear, only disclosed the information in accordance with the system; and the content of the disclosed information can't reflect in its effective; it lack of basic information disclosure, and the disclosure of the situation about it's fulfill the duty is not complete. So to make recommendations: In china, the list companies must improve the information disclosure system of audit committee, and put it into effect, and regulate the content of information disclosure.