مجلة اقتصاديات شمال افريقيا
Volume 21, Numéro 3, Pages 63-71
2025-11-11
Corporate Governance And Financial Performance: The Role Of The Audit Committee In Saudi Arabia
Authors : Mahrous Ramadan Aref . Moussa mahmoud Kamal .
Abstract
The audit committee, a key mechanism of corporate governance, plays a vital role in activating governance and control environments and enhancing the quality of financial statements, thereby contributing to improved firm performance. The characteristics of this committee are crucial, as they are considered to be the factors that determine its effectiveness in carrying out its duties. This study investigates the impact of audit committee characteristics on corporate performance. We examined 31 non-financial companies listed on the Saudi Stock Exchange from 2019 to 2022. Return on assets was used as the metric for measuring firm performance. The study’s primary variables are the characteristics of the audit committee, including audit committee size, the frequency of its meetings, its independence, and the financial knowledge of its members. We also utilized firm asset size and financial leverage as control variables. Our findings indicate that audit committee independence and the frequency of meetings have a significant and positive relationship with firm performance. Conversely, the financial knowledge of members and audit committee size showed an insignificant association. This research contributes to the existing body of knowledge by highlighting the importance of audit committee characteristics and their positive influence on firm performance within the Saudi stock market.
Keywords
Audit committee characteristics ; Firms ; performance ; Governance ; Saudi Stock Exchange
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