Research On Governance Mechanism And Governance Effect Of Audit Committee

In 1930 s, according to the development of corporate regulatory, audit committee was first showed in the USA, but there wasn’t further development then. Until 1970 s, audit committee drew attention again due to Watergate. In 1972, the USA first required listed companies to set up audit committee through format document, and in 1977 audit committee became one of the three important parts of corporate governance(the other two were managers of the company and the external auditors). But after Enron corporation fraud appeared,people began to arise questions about audit committee. Due to this, a debate about the mechanism of audit committee and whether it is effective arose.Audit committee was first introduced to China in early 21 Century, and it still remains in exploring stage. “Corporate Governance Guidelines” issued in 2002 first advised listed companies to establish audit committee, which becomes the signal of audit committee introduced into China. Whether there will be any unsuitable phenomenon? The article will research on how audit committee works in a company, and analyse the relationship with other parts of corporate governance. Other than board of supervisors, there are general meeting of stockholders, board of directors, managers, internal audit and external audit in China corporate governance, and how can audit committee work to fulfill corporate governance goals? Which characteristics of audit committee can improve corporate governance? Whether audit committee as an important fiduciary agent can effectively discharge its fiduciary duties has been challenged by researchers. The article will begin a deep debate about the above questions, discuss how audit committee works in corporate governance, and eventually add value to the company.The research targets are A-listed companies, by combing the literature and theoretical basis for establishing research hypotheses and models, based on the discuss about how audit committee work in corporate governance, using Logistic regression do matched pair research on companies getting non-standard audit opinion. Empirical studies have found that: the percentage of independent directors in audit committee has significant correlation with audit opinion, and enhance the independence of audit committee helps to improve the result of audit opinion. Also, the time of audit committee establishment has significant correlation with audit opinion, and companies establishing audit committee earlier than the Securities Regulatory Commission required may get standard audit opinion easier. Besides, the research finds that, compared with other audit committees, the percentage of independent directors in audit committees set earlier than the Securities Regulatory Commission required will have more significant correlation with audit opinion. The research also introduces the moderating variable, and concludes that corporate governance quality has significant moderating effect on how audit committee can work. For different characteristic of audit committee, the moderating effect isn’t the same.Finally, according to the above research and combined with the problems in the audit committee system, some feasible policy suggestions are provided to the government, the supervision department and the listed companies respectively.