ABSTRACT
Corporate governance is the system of rules, laws and factors that control operations in a company (Gillan 2006). These mechanisms can be either internal (e.g., boards of directors, charter provisions) or external (e.g., legal and regulatory rules, investor monitoring, external auditors). As a board committee, an audit committee (AC) is an internal governance mechanism responsible for overseeing a company’s financial reporting process. It plays an important governance role in contemporary companies. Following the accounting scandals of the early 2000s, regulators around the world have imposed the establishment of audit committees, regulated their structure (independence, competency) and stipulated oversight responsibilities regarding financial statements, audits, and internal financial controls.
