Determinants of Audit Committee Independence in the Financial Sector of Bangladesh

Bishnu Kumar Adhikary, Ranjan Kumar Mitra


This paper examines the determining factors of the audit committee independence in the financial sector of Bangladesh by employing a cross-sectional regression analysis on 72 financial firms. The paper reveals that firms with large boards and more non-executive directors tend to provide more independence to the auditors. Also, large firms with potential growth opportunities show less interest in giving freedom to the audit committee members; whereas firms with the higher leverage demand more audit committee independence to confirm quality monitoring and quality financial statements. The study, however, reveals a negative relationship between the size of the audit committee and its work independence. The study also does not find any significant association between audit committee independence and presence of experts in the audit committee, percentage of insider ownership, free cash flow, and firms’ profitability.

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Applied Finance and Accounting (AFA)        

ISSN 2374-2410(Print)           ISSN 2374-2429(Online)

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