- THE EFFECT OF AUDIT COMMITTEE CHARACTERISTICS ON FINANCIAL REPORTING QUALITY: EVIDENCE FROM UK

Audit committees play a fundamental role in ensuring that the financial statements meet all the requirements to be considered statements with financial reporting quality which are relevance, faithful representation, understandability, comparability, verifiability and timeliness. Auditors ensure the fulfilment of these requirements by conducting regular meetings throughout the financial year. These meetings serve to uphold quality control, minimize the risk of financial errors, and address various other potential issues. In order to meet these requirements, the audit committee has to be composed with financial independent experts with a board gender diversity and in the correct size in order to guarantee quality and experienced financial opinions. Therefore, the purpose of this study is to contribute with new insights into how the characteristics of audit committees impact the quality of financial reporting in companies. This research employs a quantitative approach, specifically a multiple linear regression model, to examine the influence of the selected audit committee characteristics on the quality of financial information. The study focuses on a sample of FTSE 100 firms for the financial year 2021 and analyses the impact of audit committee characteristics on income smoothing. According to the findings derived from the econometric model developed in this study, none of the selected audit committee characteristics were found to have an impact on the quality of financial reporting. Nonetheless, a correlation was observed between financial expertise and firm size, as well as a correlation between financial expertise and auditor independence.