engleski

Audit committee - a fashion accessory of corporate governance or actual need?

In the last few decades audit committees have been imposed as one of the key mechanisms of corporate governance at the global level and as sub- committees of the supervisory boards they play a key role in ensuring the transparency of financial reporting. However, numerous corporate scandals that have occurred suggest that audit committees do not fulfill their tasks in the structure of corporate governance and, in practice, unfortunately, are more a fashion accessory than actual operative body of corporations. In this paper authors examine status and characteristics of audit committees in the Republic of Croatia. It is analyzed whether audit committees operate with the aim of improving the corporate governance system and increasing the financial reporting transparency or they represent only a symbolic gesture created only with purpose of meeting regulatory requirements. Research on the status and role of audit committees in the Republic of Croatia was conducted based on annual survey of the Code of Corporate Governance that companies listed on the Stock Exchange must submit to the Zagreb Stock Exchange. The main goal of this research is to analyze the existing practices of companies listed on Zagreb Stock Exchange in terms of the existence of the audit committee and its independence in order to determine the role of audit committee in corporate governance system on the example of Croatian companies.

audit committees ; mechanisms of corporate governance ; transparency of financial reporting

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