en pl
en pl

Central European Management Journal

Zobacz wydanie
Rok 6/2021 
Tom 29 
Numer 2

Audit Committee Formation: The Case of Poland

Karolina Puławska
Kozminski University

Dorota Dobija
Kozminski University

Katarzyna Piotrowska
Kozminski University

Grygorii Kravchenko
Kozminski University

6/2021 29 (2) Central European Management Journal

DOI 10.7206/cemj.2658-0845.50

Abstrakt

Purpose: This study investigates the determinants of audit committee (AC) formation in a semi-mandatory setting of a European economy, in which ownership and control are predominantly in the hands of families and business groups, and the voluntary practice of forming an AC has not been widely accepted.

Methodology: This research uses a sample of Polish nonfinancial firms listed on the Warsaw Stock Exchange (WSE) in 2008–2015. The study implemented logistic regression to test the role of the supervisory board (SB) and companies’ compositional characteristics in AC creation.

Findings: Primary analysis provided evidence of an inverted association between commonly accepted determinants of AC formation – such as the number of independent members on the supervisory board (SB) – and accounting and finance expertise of the SB members. The study also revealed that companies with foreign ownership are more likely to have an AC.

Originality: This study indicates an important relationship between the existence of other SB committees as a meaningful determinant of AC formation. This article is valuable for supervisory bodies and regulators as they provide insights into factors that influence audit committee formation.

Powiązania

  1. Abdeljawad, I., Oweidat, G.A.I., and Saleh, N. M. (2020). Audit committee versus other governance mechanisms and the effect of investment opportunities: evidence from Palestine. Corporate Governance (Bingley), 20(3), 527–544. https://doi.org/10.1108/CG06-2019-0185. [Google Scholar]
  2. Adams, R., Gray, S., and Nowland, J. (2011). Does gender matter in the boardroom? Evidence from the market reaction to mandatory new director announcements. https://doi.org/10.2139/ssrn.1953152. [Google Scholar]
  3. [Google Scholar]
  4. Adamska, A., Bohdanowicz, L., and Gad, J. (2017). Reakcje spółek publicznych na wprowadzenie obowiązku powoływania komitetu audytu. e-mentor, 4(71), 25–35. https://doi.org/10.15219/em71.1318. [Google Scholar]
  5. Afify, H.A.E. (2009). Determinants of audit report lag: Does implementing corporate governance have any impact? Empirical evidence from Egypt. Journal of Applied Accounting Research, 10(1), 56–86. https://doi.org/10.1108/09675420910963397. [Google Scholar]
  6. Ali, M.J., Singh, R.K.S., and Al-Akra, M. (2018). The impact of audit committee effectiveness on audit fees and non-audit service fees: Evidence from Australia. Accounting Research Journal, 31(2), 174–190. [Google Scholar]
  7. Aluchna, M. (2013). Kobiety we władzach spółek: dyskusja rekomendacji Unii Europejskiej. Przegląd Organizacji, 1, 30–36. https://doi.org/10.33141/po.2013.01.06. [Google Scholar]
  8. Archambeault, D., and DeZoort, F.T. (2001). Auditor opinion shopping and the audit committee: An analysis of suspicious auditor switches. International Journal of Auditing, 5(1), 33–52. https://doi.org/10.1111/1099-1123.00324. [Google Scholar]
  9. Beasley, M.S., and Petroni, K.R. (2001). Board Independence and Audit‐Firm Type. Auditing: A Journal of Practice and Theory, 20(1), 97–114. https://doi.org/10.2308/aud.2001.20.1.97. [Google Scholar]
  10. Beasley, M.S., and Salterio, S.E. (2001). The relationship between board characteristics and voluntary improvements in audit committee composition and experience. Contemporary Accounting Research, 18(4), 539–570. https://doi.org/10.1506/RM1J-A0YM-3VMV-TAMV. [Google Scholar]
  11. Bédard, J., and Gendron, Y. (2010). Strengthening the financial reporting system: Can audit committees deliver? International Journal of Auditing, 14(2), 174–210. https://doi.org/10.1111/j.1099-1123.2009.00413.x. [Google Scholar]
  12. Bekaert, G., and Harvey, C.R. (2002). Research in emerging markets finance: looking to the future. Emerging Markets Review, 3(4), 429–448. https://doi.org/10.1016/S1566-0141(02)00045-6. [Google Scholar]
  13. Belkhir, M. (2009). Board of directors' size and performance in the banking industry. International Journal of Managerial Finance, 5(2), 201–221, https://doi.org/10.1108/17439130910947903. [Google Scholar]
  14. Best Practices Committee at the Corporate Governance Forum (2002). Best Practices in Public Companies in Poland. Warsaw, Corporate Governance Forum. Retrieved from http://www.ecgi.org/codes/documents/practices_2002.pdf. [Google Scholar]
  15. Best Practice for GPW Listed Companies (2016). Warsaw Stock Exchange. Retrieved from https://www.gpw.pl/pub/GPW/o-nas/DPSN2016_EN.pdf [Google Scholar]
  16. Bohdanowicz, L. (2015). Struktury własnościowe spółek a rotacje prezesów zarządów – wyniki badań empirycznych. Zarządzanie i Finanse, 13(3), 165–181. [Google Scholar]
  17. Bradbury, M.E. (1990). The incentives for voluntary audit committee formation. Journal of Accounting and Public Policy, 9(1), 19–36. https://doi.org/10.1016/0278-4254(90)90019-V. [Google Scholar]
  18. Bradbury, M.E., Ma, D., and Scott, T. (2019). Explanations for not having an audit committee in a ‘comply or explain’ regime. Australian Accounting Review, 29(4), 649–662. https://doi.org/10.1111/auar.12241. [Google Scholar]
  19. Bushman, R.M., and Smith, A.J. (2003). Transparency, financial accounting information, and corporate governance. Economic Policy Review, 9(1), 65–87. [Google Scholar]
  20. Carson, E. (2002). Factors associated with the development of board subcommittees. Corporate Governance: An International Review, 10(1), 4–18. https://doi.org/10.1111/1467-8683.00263. [Google Scholar]
  21. Cernat, L. (2004). The emerging European corporate governance model: Anglo-Saxon, Continental, or still the century of diversity? Journal of European Public Policy, 11(1), 147–166. https://doi.org/10.1080/1350176042000164343. [Google Scholar]
  22. Chau, G.K., and Gray, S.J. (2002). Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore. The International Journal of Accounting, 37(2), 247–265. https://doi.org/10.1016/S0020-7063(02)00153-X. [Google Scholar]
  23. Chau, G., and Leung, P. (2006). The impact of board composition and family ownership on audit committee formation: Evidence from Hong Kong. Journal of International Accounting, Auditing and Taxation, 15(1), 1–15. https://doi.org/10.1016/j.intaccaudtax.2006.01.001. [Google Scholar]
  24. Chen, L., Kilgore, A., and Radich, R. (2009). Audit committees: voluntary formation by ASX non-top 500. Managerial Auditing Journal, 24(5), 475–493. https://doi.org/10.1108/02686900910956829. [Google Scholar]
  25. Collier, P. (1993). Factors affecting the formation of audit committees in major UK listed companies. Accounting and Business Research, 23(1), 421–430. https://doi.org/10.1080/00014788.1993.9729909. [Google Scholar]
  26. Collier, P., and Zaman, M. (2005). Convergence in European corporate governance: The audit committee concept. Corporate Governance: An International Review, 13(6), 753–768. https://doi.org/10.1111/j.1467-8683.2005.00468.x. [Google Scholar]
  27. Coval, J.D., and Moskowitz, T.J. (2001). The geography of investment: Informed trading and asset prices. Journal of Political Economy, 109(4), 811–841, https://doi.org/10.1086/322088. [Google Scholar]
  28. Deli, D.N., and Gillan, S.L. (2000). On the demand for independent and active audit committees. Journal of Corporate Finance, 6(4), 427–445. https://doi.org/10.1016/S0929-1199(00)00016-X. [Google Scholar]
  29. DeZoort, F.T., and Salterio, S. E. (2001). The effects of corporate governance experience and financial reporting and audit knowledge on audit committee members' judgments. Auditing: A Journal of Practice & Theory, 20(2), 31–47. https://doi.org/10.2308/aud.2001.20.2.31. [Google Scholar]
  30. Dobija, D. (2011). Auditing jako element ładu korporacyjnego. Zeszyty Teoretyczne Rachunkowości, 64(120), 25–37. [Google Scholar]
  31. Dobija, D. (2015). Exploring audit committee practices: oversight of financial reporting and external auditors in Poland. Journal of Management & Governance, 19(1), 113–143. https://doi.org/10.1007/s10997-013-9281-6. [Google Scholar]
  32. Dwekat, A., Seguí‐Mas, E., Tormo‐Carbó, G., and Carmona, P. (2020). Corporate governance configurations and corporate social responsibility disclosure: Qualitative comparative analysis of audit committee and board characteristics. Corporate Social Responsibility and Environmental Management, 27(6), 2879–2892. https://doi.org/10.1002/csr.2009. [Google Scholar]
  33. Fama, E.F., and Jensen, M.C. (1983). Agency problems and residual claims. The Journal of Law and Economics, 26(2), 327–349. https://doi.org/10.1086/467038. [Google Scholar]
  34. García‐Sánchez, I.M., Frias‐Aceituno, J.V., and Garcia‐Rubio, R. (2012). Determining factors of audit committee attributes: Evidence from Spain. International Journal of Auditing, 16(2), 184–213. https://doi.org/10.1111/j.1099-1123.2012.00451.x. [Google Scholar]
  35. Guest, P.M. (2009). The impact of board size on firm performance: evidence from the UK. The European Journal of Finance, 15(4), 385–404. https://doi.org/10.1080/13518470802466121. [Google Scholar]
  36. Hassan, Y., and Hijazi, R. (2015). Determinants of the voluntary formation of a company audit committee: evidence from Palestine. Asian Academy of Management Journal of Accounting and Finance, 11(1), 27–46. [Google Scholar]
  37. Hillman, A.J., and Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28(3), 383–396. https://doi.org/10.5465/amr.2003.10196729. [Google Scholar]
  38. Huang, H., Lobo, G.J., and Zhou, J. (2009). Determinants and accounting consequences of forming a governance committee: Evidence from the United States. Corporate Governance: An International Review, 17(6), 710–727. https://doi.org/10.1111/j.1467-8683.2009.00769.x. [Google Scholar]
  39. Jensen, M.C., and Meckling, W.H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1111/j.1467-8683.2009.00769.x. [Google Scholar]
  40. Johnson, J.L., Daily, C.M., and Ellstrand, A. E. (1996). Boards of directors: A review and research agenda. Journal of Management, 22(3), 409–438. https://doi.org/10.1177/014920639602200303. [Google Scholar]
  41. Journal of Laws (2009, May 7). Certified Auditors, Their Self-Government, Entities Authorized to Audit Financial Statements and Public Supervision. http://prawo.sejm.gov.pl/isap.nsf/download.xsp/WDU20090770649/T/D20090649L.pdf. [Google Scholar]
  42. Journal of Laws (2017, May 11). The act of 11 May 2017 on Certified Auditors, Audit Firms and Public Supervision. http://prawo.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=WDU20170001089. [Google Scholar]
  43. [Google Scholar]
  44. Kaczmarek, S., Kimino, S., and Pye, A. (2012). Antecedents of board composition: The role of nomination committees. Corporate Governance: An International Review, 20(5), 474–489, https://doi.org/10.1111/j.1467-8683.2012.00913.x. [Google Scholar]
  45. Köhler, A.G. (2005). Audit Committees in Germany – Theoretical Reasoning and Empirical Evidence. Schmalchenbach Business Review, 57(3), 229–252. https://doi.org/10.1007/BF03396715. [Google Scholar]
  46. Kroll, M., Walters, B.A., and Wright, P. (2008). Board vigilance, director experience, and corporate outcomes. Strategic Management Journal, 29(4), 363–382. https://doi.org/10.1002/smj.649. [Google Scholar]
  47. Latusek, D., and Olejniczak, T. (2016). Development of trust in low-trust societies. Polish Sociological Review, 195, 309–325. [Google Scholar]
  48. Li, J., and Harrison, J.R. (2008). National culture and the composition and leadership structure of boards of directors. Corporate Governance: An International Review, 16(5), 375–385. https://doi.org/10.1111/j.1467-8683.2008.00697.x. [Google Scholar]
  49. Lipton, M., and Lorsch, J.W. (1992). A modest proposal for improved corporate governance. The Business Lawyer, 59–77. [Google Scholar]
  50. Mangena, M., and Tauringana, V. (2007). Disclosure, corporate governance and foreign share ownership on the Zimbabwe stock exchange. Journal of International Financial Management & Accounting, 18(2), 53–85. https://doi.org/10.1111/j.1467-646X.2007.01008.x. [Google Scholar]
  51. Mangena, M., and Tauringana, V. (2008). Audit committees and voluntary external auditor involvement in UK interim reporting. International Journal of Auditing, 12(1), 45–63. https://doi.org/10.1111/j.1099-1123.2008.00369.x. [Google Scholar]
  52. Mardjono, E.S., Chen, Y.S., and He, L.J. (2020). Earning management and the effect characteristics of audit committee, independent commissioners: Evidence from Indonesia. International Journal Of Business And Society, 21(2), 569–587. https://doi.org/10.5430/rwe.v11n3p108. [Google Scholar]
  53. Mateescu, R.A. (2015). Corporate governance disclosure practices and their determinant factors in European emerging countries. Accounting and Management Information Systems, 14(1), 170. [Google Scholar]
  54. Méndez, C.F., and García, R.A. (2007). The effects of ownership structure and board composition on the audit committee meeting frequency: Spanish evidence. Corporate Governance: An International Review, 15(5), 909–922. https://doi.org/10.1111/j.1467-8683.2007.00619.x. [Google Scholar]
  55. Menon, K., and Williams, J. D. (1994). The use of audit committees for monitoring. Journal of Accounting and Public Policy, 13(2), 121–139. https://doi.org/10.1016/0278-4254(94)90016-7. [Google Scholar]
  56. Nicholson, G.J., and Kiel, G.C. (2007). Can directors impact performance? A case‐based test of three theories of corporate governance. Corporate Governance: An International Review, 15(4), 585–608. https://doi.org/10.1111/j.1467-8683.2007.00590.x. [Google Scholar]
  57. Official Journal of the European Union (2006). Directive 2006/43/EC of the European Parliament and of the Council on Statutory Audits of Annual Accounts and Consolidated Accounts Amending Council Directives 78/660/EEC and 83/349/EEC and Repealing Council Directive 84/253/EEC. Retrieved from http://data.europa.eu/eli/dir/2006/43/2014-06-16. [Google Scholar]
  58. Omer, T.C., Shelley, M.K., and Tice, F.M. (2020). Do director networks matter for financial reporting quality? Evidence from audit committee connectedness and restatements. Management Science, 66(8), 3361–3388. https://doi.org/10.1287/mnsc.2019.3331. [Google Scholar]
  59. Pincus, K., Rusbarsky, M., and Wong, J. (1989). Voluntary formation of corporate audit committees among NASDAQ firms. Journal of Accounting and Public Policy, 8(4), 239–265. https://doi.org/10.1016/0278-4254(89)90014-8. [Google Scholar]
  60. Piot, C. (2004). The existence and independence of audit committees in France. Accounting and Business Research, 34(3), 223–246. https://doi.org/10.1080/00014788.2004.9729966. [Google Scholar]
  61. Post, C. and Byron, K. (2015). Women on boards and firm financial performance: a metaanalysis. Academy of Management Journal, 58(5), 1546–1571. https://doi.org/10.5465/amj.2013.0319. [Google Scholar]
  62. Premuroso, R.F., and Bhattacharya, S. (2007). Is there a relationship between firm performance, corporate governance, and a firm's decision to form a technology committee? Corporate Governance: An International Review, 15(6), 1260–1276. https://doi.org/10.1111/j.1467-8683.2007.00645.x. [Google Scholar]
  63. Putri, A.V., and Prasetyo, K. (2020). The Effect of Good Corporate Governance Mechanism on Earnings Management in Lq-45 Companies. Contemporary Economics, 14(4), 542–551, https://doi.org/10.11114/bms.v5i3.4313. [Google Scholar]
  64. Salloum, C., Jabbour, G., Digout, J., and Gebrayel, E. (2015). Managerial dominance over the board and audit committee independence in financial institutions. Investment Management and Financial Innovations, 12(4), 33–42. [Google Scholar]
  65. Shahid, M.S., and Abbas, M. (2019). Does corporate governance play any role in investor confidence, corporate investment decisions relationship? Evidence from Pakistan and India. Journal of Economics and Business, 105(C), https://doi.org/10.1016/j.jeconbus.2019.03.003. [Google Scholar]
  66. Shleifer, A., and Vishny, R. W. (1986). Large shareholders and corporate control. Journal of Political Economy, 94(3), 461–488. https://doi.org/10.1086/261385. [Google Scholar]
  67. Słomka-Gołębiowska, A., and Urbanek, P. (2016). Corporate boards, large blockholders and executive compensation in banks: Evidence from Poland. Emerging Markets Review, 28, 203–220. https://doi.org/10.1016/j.ememar.2016.08.001. [Google Scholar]
  68. Spira, L.F., and Bender, R. (2004). Compare and contrast: Perspectives on board committees. Corporate Governance: An International Review, 12(4), 489–499. https://doi.org/10.1111/j.1467-8683.2004.00389.x. [Google Scholar]
  69. Srinidhi, B., Gul, F.A., and Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610–1644. https://doi.org/10.1111/j.1911-3846.2011.01071.x. [Google Scholar]
  70. Staszkiewicz, P. (2019). The application of citation count regression to identify important papers in the literature on non-audit fees. Managerial Auditing Journal, 34(1), 96–115. https://doi.org/10.1108/MAJ-05-2017-1552. [Google Scholar]
  71. Wieczorek, A. (2012). Komitet audytu i komitet ds. wynagrodzeń w polskich bankach publicznych. Studia Prawno-Ekonomiczne, 85, 309–340. [Google Scholar]
  72. Yeoh, P. (2007). Corporate governance models: Is there a right one for transition economies in Central and Eastern Europe? Managerial Law, 49(3), 57–75. https://doi.org/10.1108/03090550710816483. [Google Scholar]
  73. Zaman Groff, M., and Valentinčič, A. (2011). Determinants of voluntary audit committee formation in a two-tier board system of a post-transitional economy – the case of Slovenia. Accounting in Europe, 8(2), 235–256. https://doi.org/10.1080/17449480.2011.621674. [Google Scholar]
  74. Zhou, H., Owusu-Ansah, S. and Maggina, A. (2018). Board of directors, audit committee and firm performance: evidence from Greece. Journal of International Accounting, Auditing and Taxation, 31, 20–36. https://doi.org/10.1016/j.intaccaudtax.2018.03.002. [Google Scholar]

Kompletne metadane

Cytowanie zasobu

APA style

Puławska, Karolina & Dobija, Dorota & Piotrowska, Katarzyna & Kravchenko, Grygorii (2021). Audit Committee Formation: The Case of Poland. (2021). Audit Committee Formation: The Case of Poland. Central European Management Journal, 29(2), 169-212. https://doi.org/10.7206/cemj.2658-0845.50 (Original work published 6/2021n.e.)

MLA style

Puławska, Karolina and Dobija, Dorota and Piotrowska, Katarzyna and Kravchenko, Grygorii. „Audit Committee Formation: The Case Of Poland”. 6/2021n.e. Central European Management Journal, t. 29, nr 2, 2021, ss. 169-212.

Chicago style

Puławska, Karolina and Dobija, Dorota and Piotrowska, Katarzyna and Kravchenko, Grygorii. „Audit Committee Formation: The Case Of Poland”. Central European Management Journal, Central European Management Journal, 29, nr 2 (2021): 169-212. doi:10.7206/cemj.2658-0845.50.