Business companies around the world need to develop and grow continuously by acquiring new investments but a business company without an audit committee or audit department is just like a nation without law enforcing agents. To examine the developed model, the data were obtained through a field survey from some of the selected firms in Accra, Ghana. Linear regression model were developed to analyse this paper. In terms of audit committee size (ACSIZE), the result shows a negative relationship with ROA, but significant. Also firm size (SIZE) has a positive significant relationship with (ROA). The variable that measures audit committee independence (ACIND) showed a negative significant relationship between audit committee independence and (ROA). ACMEET and AGE were insignificant to (ROA).
In-Text Citation: (Isaac Ofoeda et al., 2020)
To Cite this Article: Isaac Ofoeda, J. C., Osabutey, W., & Afoley, L. (2020). Effects of Internal Audit Committee Size on Profitability. International Journal of Academic Research in Business and Social Sciences, 10(5), 221–228.
Copyright: © 2020 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
Vol. 10, No. 5, 2020, Pg. 221 - 228
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Effects of Internal Audit Committee Size on Profitability
Isaac Ofoedab, James Commeyb, Wisdom Osabuteya, Linda Afoleya
aZhejiang Gongshang University, Xiasha Educational District, Hangzhou, China, b University of Professional Studies –Accra, Ghana (UPSA)
Abstract
Business companies around the world need to develop and grow continuously by acquiring new investments but a business company without an audit committee or audit department is just like a nation without law enforcing agents. To examine the developed model, the data were obtained through a field survey from some of the selected firms in Accra, Ghana. Linear regression model were developed to analyse this paper. In terms of audit committee size (ACSIZE), the result shows a negative relationship with ROA, but significant. Also firm size (SIZE) has a positive significant relationship with (ROA). The variable that measures audit committee independence (ACIND) showed a negative significant relationship between audit committee independence and (ROA). ACMEET and AGE were insignificant to (ROA).
Keywords: Audit Committee Independence (ACIND), Return on Assets (ROA), Size of Audit Committee (ACSIZE).
Introduction
Business companies around the world need to develop and grow continuously by acquiring new investments, but potential investors often need to ensure that the business environment is stable and safe and that they can generate long-term profits (Oroud, 2019). Effective corporate governance has been identified to be critical to all economic transactions especially in emerging and transition economies (Kyereboah-Coleman, 2008). However, the role of internal audit committee in that corporate organization is critical for the corporate overall performance. An audit is an independent examination of financial information of an organization (Arshad, Satar, Hussain, 2011). Its service helps us to detect errors and frauds at early stage and gives true views about financial information, either its performed by internal audit committee or external audit committee (Arshad, Satar, Hussain, 2011). According to Kyereboah-Coleman (2008) Corporate governance is the “ways of bringing the interests of investors and managers into line and ensuring that firms are run for the benefit of investors”. This means, the performance is a critically require as a work or assurance for the investors. The primary roles of the audit committee include overseeing the financial reporting process and to monitor the management, because management intends to manipulate figures for their own interest (Al-Mamun, Yasser, Rahman, Wickramasinghe, & Nathan, 2014). Audit committee is one of the main elements of the corporate governance helping to control management practices (Oroud, 2019). In addition, audit committees help to improve the quality of financial reports and reduce audit risk (Oroud, 2019). The audit committees play an important role in supervising and monitoring the manageme
In-Text Citation: (Isaac Ofoeda et al., 2020)
To Cite this Article: Isaac Ofoeda, J. C., Osabutey, W., & Afoley, L. (2020). Effects of Internal Audit Committee Size on Profitability. International Journal of Academic Research in Business and Social Sciences, 10(5), 221–228.
Copyright: © 2020 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
