An increasing number of earnings restatements by publicly traded companies in USA coupled with allegations of financial statement fraud and lack of responsible corporate governance have sharpened the ever increasing attention on corporate governance in general and the audit committee in particular. Over the past three decades, the value of audit committees as a mean of enhancing financial reporting quality and ensuring internal control has been recognized and these committees have become widely established in many parts of the world.
This study offers a better understanding of the comparative audit committee characteristics in Egypt, and in other countries. This study aims to describe the audit committee quality in order to have indicators about its oversight responsibilities, especially the internal control. The study involves both theoretical and field analysis. It begins with a review of the available literature which provides a basis for constructing the framework of this study. Survey was the main instrument for the field investigation. The survey was used to gather data from Egyptian audit committee members of the selected sample in order to examine audit committee characteristics and their perceived impact on the audit committee quality and to investigate whether this quality can affect positively on the internal control system.
In this study, the audit committee quality is described through its characteristics viz, independence, expertise, size, diligence and gender diversity. The results indicate that the audit committee quality is perceived positively associated with the internal control system.