The effects of audit committee characteristics on the value relevance of accounting information-in New Zealand
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The purpose of this Dissertation is to examine the link between the characteristics of an audit committee and the value relevance of accounting information. The study is carried out in with a sample of 105 companies listed on the New Zealand Stock Exchange during 2007-2009. This study uses primary variables audit committee financial literacy and audit committee independence to answer the research question - what is the effect of audit committee expertise on the value relevance of accounting earnings. Value relevance is measured by regressing stock prices on earning and book values following the Ohlson's Model (1995) that has established an ideal relationship between share prices and accounting measures. Findings from the present study of pooled regression do not support Ohlson's hypothesis. Instead, they reveal a lack of affiliation between audit committee characteristics and the value relevance of accounting information in New Zealand. The results show no positive effect of audit committee expertise on the value relevance of accounting earnings.