تجربه و تخصص کمیته حسابرسی و افشاکاری های آینده: مطالعه شرکت های آمریکایی Audit committee accounting expertise and forward-looking disclosures: A study of the US companies

1. Introduction The purpose of this paper is to investigate the association between the accounting expertise of directors and the disclosure of forward-looking information. Forward-looking information is shown to reduce the information gap between firms and investors by improving the anticipation of future earnings and investment decisions (Hussainey and Walker, 2009). This information is associated with corporate transparency as it is value-relevant for investors (CICA, 2004; IOSCO, 2003; SEC, 2003) and is expected to mitigate agency costs by reducing information asymmetries. The board of directors and its committees are a relevant corporate governance mechanism in the oversight of managerial actions (Fama and Jensen, 1983) and board members have an effect on the information disclosed in annual reports (Li et al., 2008). In recent years, both academics and standard setters have called for the improvement of the configuration of the audit committee. In the USA, the independence of audit committees is required for listed companies and there is an ongoing academic debate about the benefits of having financial experts in the audit committee. The US corporate governance standards establish that the audit committee must have at least one financial expert. Yet the EU standards have chosen a narrower definition of expertise, focusing on accounting and/or auditing expertise. The extant research about the role of the director’s financial expertise in the disclosure process is scarce and inconclusive (Chan et al., 2013; Karamanou and Vafeas, 2005; Wang and Hussainey, 2013). Audit committee members perform their tasks through the fulfillment of two main functions, not only the managerial monitoring, but also the resource provision function (Hillman and Dalziel, 2003). In particular, accounting expertise may be necessary for the experts to better perform their monitoring and resource-provision roles because the functions performed by audit committee members require having a thorough knowledge of the accounting standards, practices and procedures. The provision of resources is a key function of directors (Pfeffer and Salancik, 1978), and independent directors with valuable human capital are in an excellent position to contribute with their advice in the formulation of corporate strategy (Pugliese et al., 2009), including those decisions that have to do with the information to be disclosed to the markets. Nevertheless, the definition of financial expertise used in previous disclosure studies is broad, as specific accounting knowledge is not considered. This research adds to this prior evidence using a more specific definition of financial expertise and specifically focusing on accounting expertise. The objective is therefore to study the association between the accounting expertise of audit committee members and the disclosure of forward-looking information. This director characteristic is expected to explain better the reasons behind disclosure decisions.