Audit Committees and Voluntary External Auditor Involvement in UK Interim Reporting

International Journal of Auditing, Vol. 12, No. 1, pp. 45-63, March 2008

19 Pages Posted: 19 Mar 2008

See all articles by Venancio Tauringana

Venancio Tauringana

Bournemouth University - Accounting and Finance

Musa Mangena

University of Nottingham Business School

Abstract

The study investigates the relationship between audit committee characteristics and the decision to engage external auditors to review published interim reports. The motivation for the study derives from the consensus notion that the audit committee enhances the quality of financial reporting. Using interim reports of 258 UK listed companies published in the period 2001-2002, the results of logistic regression analyses show that the likelihood of engaging an external auditor to review interim reports increases with audit committee independence and financial expertise and decreases with share ownership by audit committee members. The results show that audit committee size and the number of audit committee meetings are not significantly associated with the decision to engage auditors in interim reporting. Taken overall, these findings suggest that an effective audit committee is associated with a review of interim reports by external auditors.

JEL Classification: M49, G34, G32

Suggested Citation

Tauringana, Venancio and Mangena, Musa, Audit Committees and Voluntary External Auditor Involvement in UK Interim Reporting. International Journal of Auditing, Vol. 12, No. 1, pp. 45-63, March 2008, Available at SSRN: https://ssrn.com/abstract=1108507 or http://dx.doi.org/10.1111/j.1099-1123.2008.00369.x

Venancio Tauringana

Bournemouth University - Accounting and Finance ( email )

Centre for Corporate Governance and Regulation
Fern Barrow
Poole BH12 5BB, Dorset
United Kingdom

Musa Mangena (Contact Author)

University of Nottingham Business School ( email )

United Kingdom

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