Research On The Influence Of Audit Committee Characteristics On The Quality Of Financial Reports

As an important corporate governance system,audit committee system plays an active role in improving the quality of financial reports and protecting the interests of investors.In2002,China's Securities Regulatory Commission(CSRC)and the United Nations Economic and Trade Commission(SETC)promulgated the "Guidelines for the Governance of Listed Companies",which stipulate that companies should set up corresponding committees to be responsible to the board of directors,while subdividing the functions of each committee.The provisions on the responsibilities of the Audit Committee include two aspects,one is internal and external.Internally,the Audit Committee supervises the internal audit system and its implementation,audits financial information and disclosure,and supervises internal control.Externally,the Audit Committee is responsible for the selection and replacement of external audit institutions,and for the exchange and communication between internal and external audits.The supervision function of the audit committee determines that the audit committee can improve the authenticity and reliability of financial information at the source.However,there are different opinions in the academic circles on whether the function of audit committee plays a supervisory role and affects the quality of financial reports.Based on the financial reporting process,this paper studies the relationship between the characteristics of the audit committee and the quality of financial reports from the perspective of the characteristics and mechanism of the audit committee.Based on the analysis of literatures at home and abroad,the research is carried out.First of all,from a theoretical point of view,the paper analyzes the impact of the size,independence,professionalism,activity and address characteristics of the Audit Committee on the quality of financial reporting.Secondly,based on the data of listed manufacturing companies in2016,this paper establishes a Logit model to test the relationship between the two.The empirical results show that scale,independence,activity and address characteristics are beneficial to improve the quality of financial reporting,consistent with the assumptions in this paper.Although the professional characteristics of the audit committee can affect the quality of financial reports,but the role is not obvious,indicating that its function is not fully played,need to be further improved.Finally,combined with the empirical conclusions,the author puts forward corresponding suggestions to improve the audit committee system in China.