An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Divesh S Sharma
Auckland University of Technology

Abstract: The current Australian regulation on audit committees is different from the U.S. and thus the U.S. results are not generalizable to Australia. I investigate two issues in this paper. First, I investigate whether the current Australian audit committee regulation or that suggested in the Australian government commissioned report (Ramsay Report) are associated with audit fees. Second, I explore whether audit committees that meet all three characteristics of independence, diligence and expertise are more strongly associated with audit fees than those that do not meet these characteristics. The results do not provide evidence of significant associations between audit fees and the current Australian audit committee requirements. I find that independent audit committees that meet frequently and comprise at least one member who is an expert in accounting and finance, are positively associated with audit fees.

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