The Effect Of The Audit Committee Characteristics On Budget Slack

As the cornerstone of the management accounting system,budget management is an indispensable comprehensive management and control tool for modern enterprises.The effectiveness of its management depends on the authenticity of budgeting.However,there are still difficulties that have yet to be overcome.Budgetary slack is a typical one.It will not only increase the transaction costs of enterprises,reduce the efficiency of resource allocation,but also hinder the effective implementation of budget management functions.Previous studies have shown that incentive mechanisms can exert a certain degree of restraint on budgetary slack.However,few supervisory mechanisms have been mentioned.In order to explore whether the audit committee can find and curb the budget slackness problems in time,this paper combines the supervisory audit committee and management's budgetary slack so that the budget management can achieve its desired effect.In addition,the audit committee plays a decisive role in corporate governance.It can strengthen the supervision of the process of financial reporting and provide a good information environment for budgeting.Furthermore,What kind of characteristics of the audit committee can reduce the company's potential agency costs,alleviate the interests conflict between managers and shareholders and prevent possible opportunistic behavior? If the audit committee can effectively perform its supervisory functions,it can reduce budgetary opportunistic behaviors,improve corporate governance effectiveness and reduce the budgetary slack.Therefore,research on the impact of the characteristics of the audit committee on the budgetary slack is particularly important.This paper takes a sample of China's A-share listed companies from 2012 to 2016.From the aspects of performance capacity and performance of duties,it studies the effects of independence,professionalism,and diligence characteristics of the audit committee on budgetary slack,researches the specific influence mechanism,which suggests that the listed company can improve the audit committee system and its structure to solve the managerial budget opportunistic behavior.The empirical results show that there is a significant negative correlation between the independence and professionalism of the audit committee and the budgetary slack.In addition,the correlation between the diligence of the audit committee and the budget slack is not significant,probably due to the lack of information disclosure.This suggests that our country should strengthen the laws and regulations on information disclosure and the companies should improve corporate governance.