The Empirical Study On The Relationship Between Audit Committee’s Characteristics And Information Disclosure Quality

As a major channel for stakeholders gaining understanding of the company, information discourser of listed company is suffering more and more attention of supervisors and users, especially in the quality of disclosed information aspect. In the early21st century, our country introduced Audit Committee System that intended to improve corporate governance structure, relieve information asymmetry and enhance the reporting quality of information. From the10years practical experience, it can be seen that the Audit Committee System is undoubtedly helpful to the promotion of quality of information disclosure. However, what characteristic that needs to be improved can prompt Audit Committee operates more effectively is still a problem that urgent to be resolved.In these circumstances, this essay will focus on the relationship between the related characteristics of committee of listed companies and the quality of information disclosure to assist the promotion of Audit Committee system by adopting the combination of normative research and empirical methods. The paper first part is an introduction of research background, thoughts and methodology that gives a brief overview of the full text. Then, this paper outlines the definition, functions and structure of Audit Committee. Analyses the establishment of Audit Committee and elaborate the impact mechanism of information disclosure brought from its related characteristics. The definition and the analyses of information disclosure is also stated as a theoretical basis for the later paragraphs. Next part is the key section that introduces a case study based on the404A share companies listed on Shenzhen Stock Exchange, that builds model by using the quality rating of information disclosure issued by Shenzhen Stock Exchange in2013as the dependent variable and choosing the following characteristics of Audit Committee:independence, specializations, size, compensation levels, management experience as the independent variables. Equation passes significance test, multicollinearity and heteroscedasticity test. By the descriptive statistical analysis, we can find that the quality of information disclosure is coming better since2006, but there are still20%of corporate remains to be improved. The regression analysis presents a positive correlation between the specializations, compensation levels, management experience of Audit Committee and the quality of information disclosure, and there is no significant correlation between the information disclosure quality and independence, the committee size, level of the financial leverage, the ownership structure the profitability,the situation that one man holds both CEO and chairman of the board. The last part analyses the empirical results and propound four feasible suggestions:Frist, continually improve the competence of audit committee and standardize the occupational qualification. Second, optimize the incentive mechanism for independent directors by combining with the rating of information disclosure quality. Third, build a good experience exchange platform and share the advanced management experience between the industry. Fourth, establish an evaluation criterion of information disclosure quality that suitable for the national capital market. In the final part, the paper illustrates the shortages and expectation to the research.