The Effects of Audit Committee's Characteristics on the Accuracy of Profit Forecasting
Keywords:
financial experience of the audit committee, independence of the audit committee, size of the audit committee, accurate forecasting of profitsAbstract
This study aims to know the effects of the audit committee's characteristics (financial experience, independence, size) on the accuracy of forecasting profits. To achieve this goal, data related to companies listed on the Tehran Stock Exchange (TSE) for the years 2012 to 2015 were extracted and the research hypotheses were tested using a regression model. The results of the research showed that there is a positive effect between the independence and size of the audit committee with the accuracy of forecasting the profits. In contrast, no significant effect was observed between the financial experience of the audit committee and the accuracy of forecasting profits. Overall, the results of this research shows that an audit committee can influence the quality of financial reports by improving the accuracy of earnings forecasting. This study contributes to help the boards of directors of companies in Iran to know the extent of the impact and effectiveness of the audit committee in forecasting profits, which could be reflected on investors in making the appropriate investment decision in Iran's capital markets.
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