The rise of the audit committee in UK quoted companies: a curious phenomenon?
- 1 January 1996
- journal article
- research article
- Published by Taylor & Francis in Accounting, Business & Financial History
- Vol. 6 (2) , 121-140
- https://doi.org/10.1080/09585209600000035
Abstract
This paper reviews some of the factors that have led to the widespread acceptance of audit committees by major UK companies since 1970 as an integral part of corporate governance systems. The paper also reviews the literature on the effectiveness of audit committees and questions why they should be seen as essential when the evidence on their effectiveness is so limited. The discussion covers: the influence of North American practices; the growth in the number of non-executive directors over the same period; corporate failures; pressures exerted by accountancy and other bodies; attempts to legislate to make audit committees mandatory; and the pressures for alternative board structures.Keywords
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