Do UK audit committees really engage with auditors on audit planning and performance?

Beattie, Vivien and Fearnley, Stella and Hines, Tony (2012) Do UK audit committees really engage with auditors on audit planning and performance? Accounting and Business Research, 42 (3). pp. 349-375. ISSN 0001-4788

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Abstract

In the wake of the financial crisis, regulators intend to increase the responsibilities of audit committees (ACs), yet little is known about how ACs discharge their existing responsibilities and interact with auditors and management. This study investigates the involvement of the AC, the AC chair (ACC), the audit partner (AP) and the chief financial officer (CFO) in relation to a range of audit-related matters in UK-listed companies in the 2007 regulatory environment, which remains fundamentally unchanged. The level of AC and ACC engagement in seven AC responsibilities set by the Combined Code is high (over 80%). However, only 50% of 16 audit planning, performance and finalisation matters are routinely discussed. The ACC acts without the full AC in 11% of discussions, while 25% involve only the CFO and AP without either the ACC or the AC. The extent of discussion and/or ACC involvement is influenced by background characteristics (company size, auditor size and ACC experience and qualifications). This evidence of less than full AC engagement with audit-related issues suggests that regulators may risk creating an AC expectations gap if AC duties under the extant model are significantly increased without structural change.

Item Type: Journal Article
Journal or Publication Title: Accounting and Business Research
Uncontrolled Keywords: /dk/atira/pure/subjectarea/asjc/1400/1402
Subjects:
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 64381
Deposited By: ep_importer_pure
Deposited On: 09 May 2013 07:53
Refereed?: Yes
Published?: Published
Last Modified: 29 Jan 2020 07:36
URI: https://eprints.lancs.ac.uk/id/eprint/64381

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