Audit committee attributes and financial performance of Saudi non-financial listed firms

Figures & data

Figure 1. Research framework.

Table 1. Descriptive statistics

Variable	Observation	Mean	Std. Div.	Minimum	Maximum
ROA	1,000	0.0547	0.0317	−0.1320	0.3550
ROE	1,000	0.0721	0.1779	−0.6251	0.4245
ACS	1,000	3.4493	0.7341	0.0000	7.0000
ACM	1,000	5.9659	1.9313	0.0000	14.000
ACI	1,000	0.4562	0.2180	0.0000	0.8000
ACFE	1,000	0.5460	0.1819	0.0000	0.8000
LEV	1,000	0.2235	0.2008	0.0000	0.9200
FS	1,000	9.3401	0.7856	5.6700	14.0400
BS	1,000	8.4100	1.5000	3.0000	13.0000
BI	1,000	0.2121	0.2136	0.0000	0.9234
FO	1,000	0.1238	0.1912	0.0000	0.9514

ROA = return on assets, ROE = return on equity, ACS = audit committee size, ACM = audit committee meetings, ACI = audit committee independence, ACFE = audit committee financial expertise, LEV = total debt over total assets, FS = firm size, BS = board size, BI = board independence and FO = family ownership

Table 2. Correlation matrix

Variable	ROA	ROE	ACS	ACM	ACI	ACFE	LEV	FS	BS	BI	FO
ROA	1.000
ROE	0.591^a	1.000
ACS	−0.023	0.192^a	1.000
ACM	−0.003	−0.121^a	0.211^a	1.000
ACI	0.101^a	0.091^b	0.197^a	0.071^b	1.000
ACFE	0.079^b	0.070^b	0.173^a	0.142^a	0.282^a	1.000
LEV	−0.549^a	−0.217^a	0.088^a	0.045	0.129^a	0.029	1.000
FS	0.052^c	0.068^c	0.324^a	0.185^a	0.102^a	0.126^a	0.388^a	1.000
BS	0.063^c	0.077^b	0.011	0.010	0.123^a	0.153^a	0.017	0.004	1.000
BI	0.017	0.145^a	0.005	0.082^b	0.092^a	0.022	0.013	0.050	−0.115^a	1.000
FO	0.221^a	0.138^a	0.109^a	0.012	0.002	0.043	0.062^c	0.017	0.002	0.075^b	1.000

Note: a, b and c indicate significance at 1% and 5%, respectively.ROA = return on assets, ROE = return on equity, ACS = audit committee size, ACM = audit committee meetings, ACI = audit committee independence, ACFE = audit committee financial expertise, LEV = total debt over total assets, FS = firm size, BS = board size, BI = board independence and FO = family ownership.

Table 3. Regression results

Variable	Pooled OLS	Fixed Effects	Random Effects
Constant	−0.044*** (0.009)	−0.065*** (0.017)	−0.056*** (0.015)
Audit committee size (ACS)	−0.005*** (0.001)	−0.005*** (0.001)	−0.005*** (0.001)
Audit committee meetings (ACM)	−0.001 (0.006)	−0.001 (0.002)	−0.001 (0.001)
Audit committee independence (ACI)	0.024*** (0.004)	0.022*** (0.003)	0.022*** (0.003)
Audit committee financial expertise (ACFE)	0.044*** (0.005)	0.007** (0.003)	0.008** (0.003)
Leverage (LEV)	−0.109*** (0.004)	−0.101*** (0.005)	−0.103*** (0.004)
Firm size (FS)	0.014*** (0.001)	0.016*** (0.002)	0.015*** (0.002)
Board size (BS)	−0.083** (0.035)	−0.171*** (0.032)	−0.169*** (0.047)
Board independence (BI)	0.089*** (0.009)	0.119*** (0.009)	0.135*** (0.015)
Family ownership (FO)	0.029*** (0.077)	0.096*** (0.024)	0.083*** (0.025)
R- squared	0.4175	0.4107	0.4144
F/Wald statistics	118.15	113.09	745.47
Prob. F/Wald statistics	0.000	0.000	0.000
Time dummies	yes	yes	yes
Year dummies	yes	yes	yes

*** and ** show significance at 1% and 5%, respectively.The numbers in parenthesis are standard errors robust to heteroscedasticity.

Table 4. Regression results

Variable	Pooled OLS	Fixed Effects	Random Effects
Constant	−0.014*** (0.004)	−0.045*** (0.013)	−0.036** (0.015)
Audit committee size (ACS)	−0.009** (0.004)	−0.021*** (0.007)	−0.010*** (0.003)
Audit committee meetings (ACM)	−0.004 (0.016)	−0.007 (0.005)	−0.009 (0.011)
Audit committee independence (ACI)	0.026*** (0.005)	0.035*** (0.006)	0.022*** (0.006)
Audit committee financial expertise (ACFE)	0.036*** (0.007)	0.057*** (0.009)	0.019** (0.005)
Leverage (LEV)	−0.113*** (0.021)	−0.141*** (0.010)	−0.115*** (0.019)
Firm size (FS)	0.012 (0.011)	0.011 (0.061)	0.017* (0.009)
Board size (BS)	−0.063** (0.030)	−0.086*** (0.031)	−0.129*** (0.021)
Board independence (BI)	0.076*** (0.011)	0.099*** (0.010)	0.045*** (0.014)
Family ownership (FO)	0.017** (0.007)	0.086*** (0.021)	0.069** (0.027)
R- squared	0.4015	0.3407	0.3146
F/Wald statistics	178.11	123.90	525.47
Prob. F/Wald statistics	0.000	0.000	0.000
Time dummies	yes	yes	yes
Year dummies	yes	yes	yes

*** and ** show significance at 1% and 5%, respectively.The numbers in parenthesis are standard errors robust to heteroscedasticity.