Fraudulent financial reporting and audit committee characteristics: a systematic review

Fraudulent financial reporting is an example of occupational fraud that occurs less frequently but the costliest. Much of the focus surrounding fraudulent financial reporting has targeted on causes and impacts of fraudulent financial reporting and the effectiveness of corporate governance mechanisms in reducing the fraud. Few systematic reviews have been carried out on the relationship between fraudulent financial reporting and audit committee characteristics. The present article sets out to analyse the existing literature from 1995 to 2020 on the relationship between fraudulent financial reporting and audit committee characteristics. A systematic review of the Web of Science and Scopus databases identified 25 related studies. Further review of these articles resulted in ten (10) characteristics of audit committee in relation to fraudulent financial reporting. They are the proportion of outside director on audit committee, audit committee’s tenure, financial expertise of audit committee, composition of independent director on board, frequency of meeting of audit committee, size of audit committee, multiple-directorships of audit committee, audit committee with problematic directors and audit committee function.