The Impact of the Audit Committees Characteristics and audit quality on the stock price crash risk - An Empirical Study on Listed Firms in the Egyptian Stock Exchange


Dr. Mahmoud Ragab Yassein Ghoneim

Purpose: This study aimed to test the impact of the audit committee characteristics and audit quality on the stock price crash risk in the Egyptian business environment. Design and Methodology: The current study adopted the content analysis approach to exam the annual reports of a sample of (54) from stock companies listed on the Egyptian Stock Exchange during the period (from 2016 to 2018), with a total of (162) views, To develop 3 models to measure this effect: the first, to measure the impact of Audit Committee Characteristics on the stock price crash risk(first hypothesis), and the second: to measure the impact of the audit quality on the stock price crash risk (the second hypothesis), Third to confirm the results of the first and second model. Conclusion and Recommendation: The results of the current study research concluded that the audit committee characteristics has a negative and statistically significant effect on reducing stock price crash risk of the study sample. Moreover, audit quality also has a negative and statistically significant effect on reducing stock price crash risk. Based on the current study results: Egyptian regulators, practitioners and policy makers should pay more attention to improve the mechanisms of corporate governance especially the audit committee characteristics and audit quality, in the way to improve capital market response and reduce stock price crash risk in the Egyptian business environment. Originality and Value: This study contributes to accounting literature by attempting to provide additional evidence to explain the role of audit committee characteristics and audit quality in reducing future stock prices crash risk in the Egyptian business environment, as an example for emerging economies.

download