Research On The Impact Of Audit Committee On Risk-taking Of Listed Commercial Banks

Preventing and resolving major financial risks is one of the three major challenges proposed in the report of the 19 th National Congress of the Communist Party of China.As an important financial institution,banks have many risks such as credit risk,market risk and operational risk in the process of operation and management.Therefore,the risk management of banks should not only strengthen the external supervision of the government and intermediary agencies,but also strengthen its own "internal performance" of risk prevention and management.Through the establishment of a reasonable corporate governance mechanism,to enhance their risk prevention and control capabilities.The audit committee is part of the governance mechanism,which influences the risks of banks by assuming the responsibility of risk oversight.At present,the research on how the audit committee affects the risk assumption of commercial banks is rarely discussed.Therefore,this paper starts from the audit committee and studies the impact of the audit committee on the risk assumption of commercial banks.This paper first reviews the audit committee and bank risk-taking related literature,and then studies the impact of the audit committee on commercial bank risk taking based on principal agent theory,stakeholder theory and resource dependencey theory,so wouldhelip to optimize corporate governance of commercial banks,improve the risk prevention and control capabilities.Based on the data of Shanghai and Shenzhen listed commercial banks from 2007 to 2017,this paper analyzes the impact of the audit committee's size,professionalism,diligence and part-time status on the risk taking of commercial banks,and controls the macro and micro factors that affect the risk taking of commercial banks,such as economic growth rate,bank size,equity concentration,bank efficiency and other variables.The findings of this paper are as follows:(1)The size of the audit committee has a negative impact on the risk taking of commercial banks.The larger the size of the audit committee,the more significant the risk taken by commercial banks can be reduced;(2)The proportion of financial experts in the audit committee has a negative impact on the risk taking of commercial banks.The more experts in the audit committee,the better the oversight function will be,and the more risk taking of commercial banks will be reduced;(3)The number of audit committee meetings have no significant impact on the bank's risk taking.Although this result is not significant,the negative relationship between the two shows that the more meetings are held,the less risk the bank will assume,that is,the more diligent the audit committee is,the more positive the role it plays in controlling the bank's risk;(4)The proportion of part-time members of the audit committee has a positive impact on the risk taking of commercial banks.It shows that the more part-time members,the worse the audit committee supervision function will be,the greater the risk the bank will take.In order to make the audit committee play a better role in supervision,according to the analysis results of this article,combining the present development of Chinese commercial banks,suggestions are put forward to improve the internal governance of commercial banks in China and to enhance the ability of risk control.