A Theoretical Analysis of the Audit Committeeas Role in China

Pao-Chen Lee
Pao-Chen Lee * §
Contact
§ Kainan University Kainan University

Send Message

To: Author

A Theoretical Analysis of the Audit Committeeas Role in China

Article Fingerprint

ReserarchID

MBRW1X37

A Theoretical Analysis of the Audit Committeeas Role in China Banner

Key Research Insights

Synthesized scholarly intelligence & interactive research assistant
Access Review Comments
  • English
  • Afrikaans
  • Albanian
  • Amharic
  • Arabic
  • Armenian
  • Azerbaijani
  • Basque
  • Belarusian
  • Bengali
  • Bosnian
  • Bulgarian
  • Catalan
  • Cebuano
  • Chichewa
  • Chinese (Simplified)
  • Chinese (Traditional)
  • Corsican
  • Croatian
  • Czech
  • Danish
  • Dutch
  • Esperanto
  • Estonian
  • Filipino
  • Finnish
  • French
  • Frisian
  • Galician
  • Georgian
  • German
  • Greek
  • Gujarati
  • Haitian Creole
  • Hausa
  • Hawaiian
  • Hebrew
  • Hindi
  • Hmong
  • Hungarian
  • Icelandic
  • Igbo
  • Indonesian
  • Irish
  • Italian
  • Japanese
  • Javanese
  • Kannada
  • Kazakh
  • Khmer
  • Korean
  • Kurdish (Kurmanji)
  • Kyrgyz
  • Lao
  • Latin
  • Latvian
  • Lithuanian
  • Luxembourgish
  • Macedonian
  • Malagasy
  • Malay
  • Malayalam
  • Maltese
  • Maori
  • Marathi
  • Mongolian
  • Myanmar (Burmese)
  • Nepali
  • Norwegian
  • Pashto
  • Persian
  • Polish
  • Portuguese
  • Punjabi
  • Romanian
  • Russian
  • Samoan
  • Scots Gaelic
  • Serbian
  • Sesotho
  • Shona
  • Sindhi
  • Sinhala
  • Slovak
  • Slovenian
  • Somali
  • Spanish
  • Sundanese
  • Swahili
  • Swedish
  • Tajik
  • Tamil
  • Telugu
  • Thai
  • Turkish
  • Ukrainian
  • Urdu
  • Uzbek
  • Vietnamese
  • Welsh
  • Xhosa
  • Yiddish
  • Yoruba
  • Zulu
Reading Preferences
Font Size
Line Spacing
Background

Abstract

This paper aims to analyze the role of the Audit Committee (AC) in China by employing the following theoretical frameworks: managerial hegemony theory to examine whether ACs in China serve as a mere “rubber stamp”; the origin of agency theory to determine whether ACs are supported by the separation of ownership and control to act as overseers and supervisors; and to use resource dependence theory to assess whether ACs provide added value by acting as consultants and trainers in China. Telephone interviews surveying 330 listed companies in China yielded 61 interviews, and the research results reveal that the AC’s role supports both the resource dependency and agency theories but conflicts with managerial hegemony theory.

References

96 Cites in Article
  1. L Abbot,S Parker,G Peters (2004). Audit Committee Characteristics and Restatements.
  2. V Acharya,M Gabarro,P Volpin (2010). Competition for managers, corporate governance and incentive compensation.
  3. Faisal Alanezi,Saad Albuloushi (2011). Does the existence of voluntary audit committees really affect IFRS-required disclosure? The Kuwaiti evidence.
  4. B Al-Najjar (2011). The determinants of audit committee independence and activity: evidence from the UK.
  5. S Bainbridge (1993). Independent Directors and the ALO Corporate Governance Project.
  6. A Barua,D Rama,V Sharma (2010). Audit committee characteristics and investment in internal auditing.
  7. Max Bazerman,F Schoorman (1983). A Limited Rationality Model of Interlocking Directorates..
  8. M Beasley (1996). An Empirical Analysis of the Relation between the Board of Director Composition and Financial Statement Fraud.
  9. J Bédard,S Chtourou,L Courteau (2004). The Effect of Audit Committee Expertise, Independence, and Activity on Aggressive Earnings Management.
  10. A Berle,G Means (1932). A.A. Berle and G.C. Means, The Modern Corporation and Private Property. Revised Edition. New York, Harcourt, Brace & World, Inc., 1968, XLVI p. 380 p., $ 9.75..
  11. L Braiotta (1999). The Audit Committee Handbook.
  12. Brc (1999). Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees: Report and Recommendations, Blue Ribbon Committee.
  13. A Cadbury (1992). Highlights Of The Proposals Of The Committee On Financial Aspects Of Corporate Governance.
  14. J Carcello,T Neal,Z Palmrose,S Scholz (2011). CEO Involvement in Selecting Board Members, Audit Committee Effectiveness, and Restatements*.
  15. M Carpenter,J Westphal (2001). The Strategic Context of External Network Ties: Examining the Impact of Director Appointments on Board Involvement in Strategic Decision Making.
  16. (2020). Policy and Economic Frameworks to Deepen Sino-Saudi Cooperation.
  17. R Chandrasegaram,M Rahimansa,S Rahman,S Abdullah,N Mat (2013). Impact of Audit Committee Characteristics on Earnings Management in Malaysian Public Listed Companies.
  18. S Chang (2001). Exploration the system of establishing Audit Committee for the Chinese listing corporations (我國公司成立審計委員會動機的實證 研究) Modern Finance and Economics.
  19. William Clendenin (1972). Company Presidents Look at the Board of Directors.
  20. P Cochran,S Wartic (1988). Corporate Governance: A Review of Literature (公司治理--文献回顾.
  21. Jeffrey Cohen,Lisa Gaynor,Ganesh Krishnamoorthy,Arnold Wright (2011). The Impact on Auditor Judgments of CEO Influence on Audit Committee Independence.
  22. Jeffrey Cohen,Ganesh Krishnamoorthy,Arnie Wright (2010). Corporate Governance in the Post‐Sarbanes‐Oxley Era: Auditors’ Experiences*.
  23. Paul Collier (1996). The rise of the audit committee in UK quoted companies: a curious phenomenon?.
  24. Coso (1987). Committee of Sponsoring Organizations (COSO).
  25. (2006). Guidelines for the Articles of Association of Listed Companies (as amended in 2006). 上市公司章程指引.
  26. P Drucker (1974). Management: Tasks Responsibility Practice.
  27. Kathleen Eisenhardt (1989). Agency Theory: An Assessment and Review.
  28. Eugene Fama,Michael Jensen (1983). Agency Problems and Residual Claims.
  29. Eugene Fama,Michael Jensen (1983). Separation of Ownership and Control.
  30. S Finkelstein,D Hambrick (1996). Strategic Leadership: Top Executives and their Effects on Organizations.
  31. Michael Firth,Peter Fung,Oliver Rui (2007). Ownership, two-tier board structure, and the informativeness of earnings – Evidence from China.
  32. Frc (2010). THE UK CORPORATE GOVERNANCE CODE (FINANCIAL REPORTING COUNCIL, JUNE 2010).
  33. J Frey (1989). Survey Research by Telephone.
  34. Aloke Ghosh,Antonio Marra,Doocheol Moon (2010). Corporate Boards, Audit Committees, and Earnings Management: Pre‐ and Post‐SOX Evidence.
  35. Jerry Goodstein,Kanak Gautam,Warren Boeker (1994). The effects of board size and diversity on strategic change.
  36. Jenny Goodwin-Stewart,Pamela Kent (2006). Relation between external audit fees, audit committee characteristics and internal audit.
  37. L He,R Labelle,C Piot,D Thornton (2009). Board monitoring, audit committee effectiveness, and financial reporting quality: Review and synthesis of empirical evidence.
  38. E Herman (1981). Edward S. Herman. Corporate Control, Corporate Power. A Twen tieth Century Fund Study. New York: Cambridge University Press, 1981.
  39. S Hill (1995). The Social Organization of Boards of Directors.
  40. Humphry Hung (1998). A typology of the theories of the roles of governing boards.
  41. S Ika,N Ghazali (2012). Audit committee effects and timeliness of reporting: Indonesian evidence.
  42. C Ingley,N Van Der Walt (2001). The Strategic Board: the changing role of directors in developing and maintaining corporate capability.
  43. V Iyer,E Bamber,Griffin (2013). Characteristics of audit committee financial experts:et al. 2013. Characteristics of audit committee financial experts: an empirical study.
  44. Michael Jensen,William Meckling (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure.
  45. J Johnson,C Daily (1996). Boards of Directors: A Review and Research Agenda.
  46. I Kesner,R Johnson (1990). An Investigation of the Relationship between Board Composition and Stockholder Suits.
  47. G Kiel,G Nicholson (2003). Board Composition and Corporate Performance: How the Australian Experience Informs Contrasting Theories of Corporate Governance.
  48. A Klein (2002). AC, board of director characteristics, and earnings management.
  49. A Klein (2002). Economic Determinants of AC Independent.
  50. G Krishnan,G Visvanathan (2008). Does the SOX Definition of an Accounting Expert Matter? The Association between Audit Committee Directors' Accounting Expertise and Accounting Conservatism*.
  51. Jagan Krishnan,Jong Lee (2009). Audit Committee Financial Expertise, Litigation Risk, and Corporate Governance.
  52. P Lavrakas (1993). Telephone survey methods: sampling, selection and supervision.
  53. Jing Li,Musa Mangena,Richard Pike (2012). The effect of audit committee characteristics on intellectual capital disclosure.
  54. G Liu,P Sun (2005). The Class of Shareholdings and its Impacts on Corporate Performance: A Case of State Shareholding Composition in Chinese Public Corporations.
  55. Jay Lorsch,Jack Young (1989). Pawns or Potentates: the reality of America's corporate boards.
  56. M Mace (1971). M.L. Mace Directors: Myth and Reality. Boston, Division of Research, Graduate School of Business Administration, Harvard University, 1971, X p. 207 p., $6.00..
  57. Terry Mcnulty,Andrew Pettigrew (1999). Strategists on the Board.
  58. M Mizruchi (1983). Who Control Whom? An Examination of the Relation between Management and Boards of Directors in Large American Corporations.
  59. Mark Mizruchi,Linda Stearns (1988). A Longitudinal Study of the Formation of Interlocking Directorates.
  60. Melinda Muth,Lex Donaldson (1998). Stewardship Theory and Board Structure: a contingency approach.
  61. Npc (2006). Company Law of the People's Republic of China 中华人民共和国公司法.
  62. Vasiliki Tsaganos,Lawrence Bard,Erika Moore (2003). New era dawns for listed companies: NYSE and Nasdaq adopt final corporate governance rules.
  63. (1992). OECD Wirtschaftsausblick, Ausgabe 1992/1.
  64. John Pearce,Shaker Zahra (1991). The relative power of ceos and boards of directors: Associations with corporate performance.
  65. A Pettigrew (1992). On Studying Managerial Elites.
  66. J Pfeffer (1972). Size and Composition of Corporate Boards of Directors: The Organization and its Environment.
  67. J Pfeffer,G Salancik (1978). The External Control of Organizations: A Resource Dependence Perspective.
  68. Pob (1993). the Public Interest: A Special Report.
  69. (1993). ROLE OF INTERNAL AUDITORS AND SUSTAINABILITY REPORTING: MEDIATING EFFECTS OF AUDIT COMMITTEE PERFORMANCE.
  70. James Price (1963). The Impact of Governing Boards on Organizational Effectiveness and Morale.
  71. K Raghunandan,D Rama (2007). Determinants of audit committee diligence.
  72. R Rahman,F Ali (2006). Board, audit committee, culture and earnings management: Malaysian evidence.
  73. J Sarkar,S Sarkar (2012). Auditor and audit committee independence in India.
  74. Vineeta Sharma,Vic Naiker,Barry Lee (2009). Determinants of Audit Committee Meeting Frequency: Evidence from a Voluntary Governance System.
  75. Andrei Shleifer,Robert Vishny (1997). A Survey of Corporate Governance.
  76. Sox (2002). The Public Company Accounting Reform and Investor Protection Act. ("The Sarbanes-Oxley Act.
  77. D Washington (2005). USA: The US Congress.
  78. Sse (2000). Shanghai Stock Exchange Guidelines for CGof Listed Companies 上市公司治理指引.
  79. L Stearns,M Mizruchi (1993). Board Composition and Corporate Financing: The Impact of Financial Institution Representation on Borrowing.
  80. Jenny Stewart,Lois Munro (2007). The Impact of Audit Committee Existence and Audit Committee Meeting Frequency on the External Audit: Perceptions of Australian Auditors.
  81. Philip Stiles,Bernard Taylor (2001). Researching Boards of Directors.
  82. X Su,S Chen,Z-L Wang (2005). An Analysis of Auditing Environment and Modified Audit Opinions in China: Underlying Reasons and Lessons.
  83. M Useem (1984). The Inner Circle: Large Corporations and the Rise of Business Political Activity in the U.S. and U.
  84. Nikos Vafeas,Elena Theodorou (1998). THE RELATIONSHIP BETWEEN BOARD STRUCTURE AND FIRM PERFORMANCE IN THE UK.
  85. N Van Der Walt,C Ingley (2003). Board Dynamics and the Influence of Professional Background, Gender and Ethnic Diversity of Directors.
  86. S Vance (1983). Corporate Leadership: Boards, Directors and Strategy.
  87. W Wang (2005). The Research of Corporate Governance Structure (公司治理結構之研究).
  88. J Wesphal (1999). COLLABORATION IN THE BOARDROOM: BEHAVIORAL AND PERFORMANCE CONSEQUENCES OF CEO-BOARD SOCIAL TIES..
  89. T Whisler (1984). The Rules of the Game: Inside the Corporate Board Room.
  90. Jason Xiao,Jay Dahya,Zhijun Lin (2004). A Grounded Theory Exposition of the Role of the Supervisory Board in China*.
  91. Biao Xie,Wallace Davidson,Peter Dadalt (2003). Earnings management and corporate governance: the role of the board and the audit committee.
  92. Alhaji Yakasai (2001). Corporate Governance in a Third World Country with Particular Reference to Nigeria.
  93. F Yin,S Gao,W Li,H Lv (2012). Determinants of audit committee meeting frequency: evidence from Chinese listed companies.
  94. Mayer Zald (1967). Urban Differentiation, Characteristics of Boards of Directors, and Organizational Effectiveness.
  95. Maurice Zeitlin (1974). Corporate Ownership and Control: The Large Corporation and the Capitalist Class.
  96. Y Zhang,J Zhou,N Zhou (2007). Audit committee quality, auditor independence, and internal control weaknesses.
Show All References
Download References

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Pao-Chen Lee. 2015. "A Theoretical Analysis of the Audit Committeeas Role in China". Global Journal of Management and Business Research - D: Accounting & Auditing GJMBR-D Volume 14 (GJMBR Volume 14 Issue D5).

More Citation Formats

Download Citation

  • Open Access
  • CC-BY-ND-NC 4.0
Download Article
Access OJS
Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords
audit committeeCorporate GovernanceRolesupervisory board
Classification
GJMBR-D Classification JEL Code: M42
  • Submission ReceivedDecember 10, 2013
  • Peer Review Double Blind
    Handling Editor
  • Accepted January 4, 2014
  • Published January 15, 2014
Version of record

v1.2

Issue date
February 3, 2015

Language
English
Order Article Reprint
Experiance in AR

Explore published articles in an immersive Augmented Reality environment. Our platform converts research papers into interactive 3D books, allowing readers to view and interact with content using AR and VR compatible devices.

View in VR
Read in 3D

Your published article is automatically converted into a realistic 3D book. Flip through pages and read research papers in a more engaging and interactive format.

View in 3D
Article Matrices
Total Views: 1.8K
Total Downloads: 102
All Trends

Request Access

Please fill out the form below to request access to this research paper. Your request will be reviewed by the editorial or author team.
X

This is the heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

High-quality academic research articles on global topics and journals.

A Theoretical Analysis of the Audit Committeeas Role in China

Pao-Chen Lee
Pao-Chen Lee Kainan University
Pao-Chen Lee
Pao-Chen Lee
  • Submission ReceivedDecember 10, 2013
  • Peer Review Double Blind
    Handling Editor
  • Accepted January 4, 2014
  • Published January 15, 2014