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

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Do UK audit committees really engage with auditors on audit planning and performance? / Beattie, Vivien; Fearnley, Stella; Hines, Tony.

In: Accounting and Business Research, Vol. 42, No. 3, 01.08.2012, p. 349-375.

Research output: Contribution to journalJournal articlepeer-review

Harvard

Beattie, V, Fearnley, S & Hines, T 2012, 'Do UK audit committees really engage with auditors on audit planning and performance?', Accounting and Business Research, vol. 42, no. 3, pp. 349-375. https://doi.org/10.1080/00014788.2012.698090

APA

Vancouver

Author

Beattie, Vivien ; Fearnley, Stella ; Hines, Tony. / Do UK audit committees really engage with auditors on audit planning and performance?. In: Accounting and Business Research. 2012 ; Vol. 42, No. 3. pp. 349-375.

Bibtex

@article{af709603711a41c1ba7bba40fe2f1d35,
title = "Do UK audit committees really engage with auditors on audit planning and performance?",
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.",
keywords = "audit committee, audit interaction , discussion , engagement , involvement , negotiation",
author = "Vivien Beattie and Stella Fearnley and Tony Hines",
year = "2012",
month = aug,
day = "1",
doi = "10.1080/00014788.2012.698090",
language = "English",
volume = "42",
pages = "349--375",
journal = "Accounting and Business Research",
issn = "0001-4788",
publisher = "Routledge",
number = "3",

}

RIS

TY - JOUR

T1 - Do UK audit committees really engage with auditors on audit planning and performance?

AU - Beattie, Vivien

AU - Fearnley, Stella

AU - Hines, Tony

PY - 2012/8/1

Y1 - 2012/8/1

N2 - 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.

AB - 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.

KW - audit committee

KW - audit interaction

KW - discussion

KW - engagement

KW - involvement

KW - negotiation

U2 - 10.1080/00014788.2012.698090

DO - 10.1080/00014788.2012.698090

M3 - Journal article

VL - 42

SP - 349

EP - 375

JO - Accounting and Business Research

JF - Accounting and Business Research

SN - 0001-4788

IS - 3

ER -