Faculty of Business, Economics and Law (Te Ara Pakihi, Te Ōhanga Me Te Ture)

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The Faculty of Business, Economics and Law - Te Ara Pakihi, Te Ōhanga Me Te Ture is committed to conducting research that matters. Research that matters is both research of high academic quality and impact, and research of relevance and value for business, the professions, government and society. The Faculty of Business, Economics and Law, comprises The Business School - Te Kura Kaipakihi and The Law School - Te Kura Ture.

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Does Audit Committee Busyness Affect Financial Restatement? Evidence From Audit Committee Share Ownership
(Wiley, 2024-01-29) Uddin Bhuiyan, MB; Opare, S; Ahmed, Z
We examine the association between audit committee (AC) busyness and financial restatement and determine whether AC share ownership moderates this relationship. Using logit regression analysis, we test our hypotheses on a sample of 6408 firm-year observations from 2004 to 2015 for companies listed on the Australian Securities Exchange. The study reveals that firms with busy ACs engage more in financial restatements. We also find that AC share ownership reduces financial restatements and attenuates the association between AC busyness and financial restatement. Our results are robust to endogeneity concerns emanating from firms’ deliberate decisions to grant shares to AC members. The findings of this research have several important policy implications. For instance, shareholders can benefit from AC members’ monitoring ability by allowing for share ownership. Further, our findings suggest that principles-based corporate governance guidelines have a beneficial effect on financial reporting quality. While prior studies offer mixed evidence, our research contributes to the auditing literature by providing evidence that AC share ownership moderates the association between AC busyness and financial restatement.