Preliminary evidence on the relationship between corporate governance attributes and audit committee functionality in Egypt: beyond checking the box
Abstract
Purpose
This exploratory study aims to provide preliminary evidence regarding the non-audit committee corporate governance determinants of audit committee functionality.
Design/methodology/approach
The study is based on archival accounting, corporate governance data, and interviews of subjects of the top 100 companies listed on the Egyptian Stock Exchange (EGX100). A logistic regression is used to identify the non-audit committee governance attributes that affect the likelihood of of having a functional audit committee.
Findings
Board size and board independence, (CEO-chairman duality) are positively (negatively) related to audit committee functionality, suggesting complementary governance relations. On the other hand, the authors document a negative relation between auditor type (Big4) and audit committee functionality indicating a substitutive governance effect.
Originality/value
To the best of the authors' knowledge, this is the first study that explores the actual functioning of audit committees in Egypt beyond mere regulatory requirements. The study highlights the importance of assuring that the “spirit” of corporate governance laws and regulations is adhered to rather than the mere compliance with their “letter”.
Keywords
Acknowledgements
Received 23 January 2011 Revised 23 January 2011 Accepted 15 March 2011
Citation
Abdel-Meguid, A., Samaha, K. and Dahawy, K. (2014), "Preliminary evidence on the relationship between corporate governance attributes and audit committee functionality in Egypt: beyond checking the box", Corporate Governance, Vol. 14 No. 2, pp. 197-210. https://doi.org/10.1108/CG-01-2011-0004
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited