An Empirical Analysis of Audit Committee Member Resignations Due to Policy Disputes with the Management
Audit committee resignations, policy disputes, commitments, logistic regression, auditors
Accounting | Organizational Behavior and Theory
Audit Committee (AC) resignations due to policy disputes may imply that the company is financially weak. Statistical analyses are performed to examine financial attributes of firms with pre-crisis (pre- 2008) and post-crisis (2008 and after) resignations. Univariate test results indicate that the companies where AC resignations occurred pre-crisis are smaller and have higher total asset turnover ratios and post-crisis resignations are associated with more unqualified audit opinions. Multivariate logit results indicate that size, auditor opinion, intangible assets to total ratios, and inventory turnover ratios are significantly different between the two groups. Tobin’s Q is marginally different between the two groups.
Journal of Accounting and Finance
Ragothaman, S., and Cornelsen, E. (2015). An Empirical Analysis of Audit Committee Member Resignations Due to Policy Disputes with the Management. Journal of Accounitng and Finance, 15(7), 94-102.