The Role of the Independent Director: Evidence from a Survey of Independent Directors in Australia

The purpose of this paper is to report the results of a survey of independent directors on a range of issues relating to the execution of their role including the independent directors’ perceptions relating to board effectiveness, board interactions, information sources, and performance and evaluation. A survey was forwarded to independent directors of the top 200 Australian Securities Exchange (ASX) listed companies. The paper aims to provide the perceptions of independent directors themselves and so contribute to the literature through a better understanding of the nature of the work performed by Australian company independent directors and the environment in which it occurs. Findings suggest that the fundamental role of the independent director has not changed as a result of the corporate governance reforms

The Impact of Audit Committee Existence and Audit Committee Meeting Frequency on the External Audit: Perceptions of Australian Auditors

This article examines the impact of audit committee existence, the frequency of audit committee meetings and the auditor's attendance at meetings on aspects of the external audit. Using an experimental design, we find that the audit committee, the frequency of committee meetings and the auditor's attendance at meetings are significantly associated with a reduction in perceived audit risk. The impact on audit efficiency and audit testing is perceived to be minimal. Manager and partner hours are greater when meetings are more frequent and the partner attends all meetings. The audit committee is expected to provide assistance in resolving conflicts with management and to lead to some improvement in overall audit quality. In neither case is this affected by meeting frequency or the auditor's attendance at meetings. Participants expect the existence of an audit committee to lead to an increase in audit fees, particularly when meetings are more frequent and the auditor is required to attend meetings. Reasons given for any fee increase relate to the additional preparation for and attendance at meetings

Experience of Audit Committee Members and Audit Quality

We investigate whether the experience of audit committee members is associated with audit quality. In order to comprehensively analyse the experience of audit committee members, we include audit committee member tenure, age and multiple-directorships in our analysis. Using observations from 2001 to 2012, we undertake analysis on 13,155 firm-year observations and find that all our proxies of audit committee member experience are positively associated with audit fees. A range of additional tests, including using discretionary accruals as an alternative measure of audit quality and differences-in-differences analysis, support our main findings and our results consequently make a number of contributions to both the literature and policy making. One possible policy contribution is that regulators may wish to consider audit committee characteristics representing experience when framing recommendations to improve audit quality and thereby, financial reporting by firms