IImpacts of Audit Committee Effectiveness and Audit Quality on Earnings Quality of Listed Companies in Stock Exchange of Thailand

Abstract

Objectives of this study are to study (1) relationship between audit committee effectiveness and earnings quality of the listed companies in the Stock Exchange of Thailand, (2) relationship between audit quality and earnings quality of the listed companies in the Stock Exchange of Thailand, and (3) relationship between earnings quality and dividend payout of the listed companies in the Stock Exchange of Thailand. Quantitative method is employed using panel data of 1,481 listed companies in the Stock Exchange of Thailand during 2009 to 2013. Panel data models are estimated using fixed-effects and random-effects models. The findings reveal that (1) combination of audit committees is positively related to earnings quality, (2) switching audit firm from Big4 to Non-big4 has positive relationship with earnings quality, (3) going concern opinion of auditors is negatively related to earning quality, and (4) earning quality has positive impact on dividend payout. Companies with better earning quality are more likely to pay dividend in order to signal better earning quality of the companies.