The effectiveness of independent audit committee directors with accounting certifications in preventing reporting irregularities in publicly traded companies

This research project focused on the question: Does inclusion of independent financially literate and/or accounting certified audit committee directors reduce the incidence of management misreporting? The purpose of the study was to evaluate the effect of accounting certified independent audit committee members as part of the recent empirical research examining board composition variables in determining company performance. The scope of this research is limited to disclosure in Securities and Exchange Commission (SEC) Accounting and Auditing Enforcement Releases, other SEC filings, other published literature, and the membership rosters of the American Institute of Certified Public Accountants, Institute of Certified Management Accountants, and the Institute of Internal Auditors. This study concludes that audit committee effectiveness is not dependent solely on the presence of independent directors with financial literacy or accounting certification.