Building on resource dependence theory, this study examines the effect of audit committee characteristics on audit quality proxied by audit fees. Our sample includes all publicly listed Jordanian banks covering the period 2017–2021. The results of the analysis of our panel data suggest that audit committee financial and accounting expertise and audit committee size have a significant positive association with audit fees. Nevertheless, the gender diversity of the audit committee has a negative relationship with audit fees, suggesting that more female members on the audit committees of Jordanian banks are likely to pressurize the audit fee quote. Further, the effect of audit committee independence on audit fees being statistically indifferent from zero contradicts expectations. However, we propose that having many small audit committees is behind the observed finding. Our results suggest several critical corporate governance implications for banks, equity investors, and bank regulators.

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Audit Committee Characteristics and Audit Fees–Evidence from the Jordanian Banking Sector

  • Omar Abu Omar,
  • Ahmad Ahmad,
  • Khalil Nimer

摘要

Building on resource dependence theory, this study examines the effect of audit committee characteristics on audit quality proxied by audit fees. Our sample includes all publicly listed Jordanian banks covering the period 2017–2021. The results of the analysis of our panel data suggest that audit committee financial and accounting expertise and audit committee size have a significant positive association with audit fees. Nevertheless, the gender diversity of the audit committee has a negative relationship with audit fees, suggesting that more female members on the audit committees of Jordanian banks are likely to pressurize the audit fee quote. Further, the effect of audit committee independence on audit fees being statistically indifferent from zero contradicts expectations. However, we propose that having many small audit committees is behind the observed finding. Our results suggest several critical corporate governance implications for banks, equity investors, and bank regulators.