Abstract:

The main objective of this paper is to study the relationship between audit committee characteristics (independence, size, expertise and diligence) and external audit quality for  Belgian  listed  companies.  The  quality  of  external  audit  is approximated  by  a composite multi-items index. The results indicate that the size and the diligence of the audit committee  enhance  the  quality  of  financial  reporting  and  audit  process  for Belgian companies. This is in favor of a complementary effect. However, we find a substitution relation between audit committee expertise and external audit quality.