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The impact of audit committee characteristics on Saudi bank performance

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  • Omar Habtoor

    (Assistant Professor, Department of Administrative Sciences, Applied College, Northern Border University, Saudi Arabia; Department of Accounting, Faculty of Administrative Sciences, Aden University, Yemen; Applied College, Al Qadisiyah Street, Rafha, 76321, Northern Borders Region, Saudi Arabia)

Abstract

This paper examines the impact of audit committee characteristics on the performance of Saudi listed banks. Data are collected from the annual reports of Saudi listed banks from 2010 to 2018. To test hypotheses, this study applies the random effects model as the main method of analysis, while the ordinary least square (OLS), the feasible generalized least squares (FGLS), and the panel-corrected standard errors (PCSE) methods are used for robustness check and additional analysis. The empirical results indicate a significant positive effect of audit committee independence on all measures of bank performance (ROA, ROE, Tobin’s Q). The empirical results of this study also provide important implications for regulatory bodies and market participants in Saudi Arabia and developing countries to understand the actual role of different attributes of the audit committees on firm performance. Key Words:Audit Committee Characteristics, Bank Performance, Saudi Arabia, Panel Data Analysis, Corporate Governance

Suggested Citation

  • Omar Habtoor, 2022. "The impact of audit committee characteristics on Saudi bank performance," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 388-401, September.
    • Handle: RePEc:rbs:ijbrss:v:11:y:2022:i:6:p:388-401
    DOI: 10.20525/ijrbs.v11i6.1969
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    References listed on IDEAS

    as
    1. Saseela Balagobei, 2018. "Corporate Governance and Firm Performance: Empirical Evidence from Emerging Market," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(12), pages 1415-1421.
    2. Ismail Gani & Albert Wijeweera & Ian Eddie, 2017. "Audit Committee Compliance and Company Performance Nexus: Evidence from ASX Listed Companies," Business and Economic Research, Macrothink Institute, vol. 7(2), pages 135-145, December.
    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    4. Saseela Balagobei, 2018. "Corporate Governance and Firm Performance: Empirical Evidence from Emerging Market," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(12), pages 1415-1421, December.
    5. Habib Ur Rahman & Asif Ali, 2022. "Revisiting the role of audit and compensation ‘committees’ characteristics in the financial performance of the non-financial sector through the lens of the difference generalised method of moments," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2085365-208, December.
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