Global Review of Accounting and Finance
Vol.12 . No.1. July 2021 Issue, July 2021, Pages: 43–57
Effect of Attributes of Audit Committee on Financial Performance: The Case of Sri Lanka This study investigates the effects of the audit committee (AC) attributes such as AC size, AC independence, AC finance expertise and AC meeting frequency on firm performance of listed Sri Lankan companies during 2014 – 2018. Secondary data available on the Colombo Stock Exchange website and audited financial statements of a sample of 196 companies were analyzed using random effects model. Findings of the study revealed a significantly positive effect from three attributes of the AC (i.e., AC size, AC independence, and AC meeting frequency) on firm performance, while there is no statistically significant relationship between the AC independence and firm performance of the selected companies for the study. This study adds empirical findings on the effect of AC attributes on firm performance in developing nations context. Further, it becomes one of the very few studies on the same effects on firm performance of Sri Lankan firms. Moreover, this is the first study which has attempted to analyze the effects of AC attributes on firm performance by incorporating data of companies in the post period of introducing the new Code of Best Practices on Corporate Governance - 2017 in Sri Lanka.