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Audit Committee Dimension and Firm Profitability in Central and Eastern European Countries

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  • Paula-Andreea Terinte

    (“Alexandru Ioan Cuza" University of Iași)

Abstract

The aim of the paper is to analyze the association between audit committee dimension and firm profitability, using a sample of listed companies from Central and Eastern European countries. In order to conduct the analysis, the data regarding the audit variable is hand-collated data from the Annual Reports of the companies, data regarding the financial characteristics of companies is from Orbis database, and data regarding the macroeconomic variables is from Word Bank database. Using OLS model we found that audit committee size positively influences firm profitability through better monitoring operating performance of the company providing higher authority and extensive knowledge base reflected in increased profitability. Our results benefit corporate practices as evidence in straining the role of audit committees, support shareholders and managers by providing evidence and solutions to improve credibility and compliance of financial statements, as well as investors and creditors in sustaining efficient allocation and monitoring of their capital.

Suggested Citation

  • Paula-Andreea Terinte, 2019. "Audit Committee Dimension and Firm Profitability in Central and Eastern European Countries," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 908-915, December.
    • Handle: RePEc:ovi:oviste:v:xix:y:2019:i:2:p:908-915
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    References listed on IDEAS

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    More about this item

    Keywords

    Internal Audit Committee; firm profitability; CEE countries;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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