Audit Committee Characteristics and Their Impact on Financial Transparency

Abstract

This study investigates the impact of audit committee characteristics on financial transparency by employing a mixed-methods design that integrates quantitative econometric modeling with qualitative thematic analysis. Using panel data from publicly listed firms between 2018 and 2023, alongside semi-structured interviews with audit committee members, auditors, and financial analysts, the research evaluates how independence, size, financial expertise, gender diversity, and meeting frequency shape the integrity of financial reporting. The quantitative results demonstrate that audit committee independence and financial expertise significantly enhance earnings quality and reduce discretionary accruals, while larger committees with diverse membership improve voluntary disclosure and sustainability reporting practices. Meeting frequency is positively associated with timely financial reporting and a reduction in restatements, further highlighting the role of diligence in governance effectiveness. Complementary qualitative evidence reveals that experienced and independent audit committees not only mitigate opportunistic managerial behavior but also foster a culture of accountability and transparency within organizations. The integration of these findings confirms that well-structured audit committees are central to ensuring financial reporting reliability and extending transparency into environmental, social, and governance (ESG) dimensions. This study contributes to the governance literature by demonstrating the universal applicability of robust audit committee characteristics across diverse institutional contexts and offers actionable insights for policymakers, regulators, and corporate boards aiming to strengthen governance frameworks and stakeholder trust.