Literature Review The Securities And Exchange Commission

Literature review: Green (1994) said that there are many ways to supervise an enterprise and an audit committee is an important proportion of this supervision. The Securities and Exchange Commission (SEC) in the United States first provided a theory that every public enterprise should establish its own audit committees in 1940 (SEC, 1940). After 1970, the SEC has passed the theory as practice (SEC, 1972), and the New York Stock Exchange (NYSE) suggested its members who listed in NYSE that the audit committees made up of outside directors, which is non-executive directors (NYSE, 1978). After a decade development of this suggestion, the Teadway Commission reinforced it, which suggested that all public companies should be stipulated through†¦show more content†¦Similarly, there were relative requirements of independent audit committees in Canada (Toronto Stock Exchange Committee, 1994). In recent 30 years, there were majority empirical researches about the audit committees have been addressed in various areas in the range of world. For example, DeZoort (1997) has completed the issues of audit committees’ constitution and duties. What’s more, Beasley (1996) paid attention on the impacts of audit committees in organizational effectiveness, which was the similar for McMullen D. A. (1996), who focused on the performance of audit committees. The Securities and Exchange Board of India (SEBI, 2004) has illustrated the regulations of audit committees for listed companies, which were all listed companies should have an audit committee, and the committee must has more than three directors as members, what’s more, two-thirds of the members in the audit committees must be independent directors (non-executive directors), and every member in the audit committees should be financially literate and at least one of them has accounting or relative financial management expertise. SEBI also highlighted the Chairman of the Audit Committee should be an independent directors (non-executive directors). There are many researchers focused on the main point of effectiveness of audit committeesShow MoreRelatedReview Of Previous Empirical Literature1557 Words   |  7 PagesReview of previous empirical literature: A core element in the economic literature is the center on expansion and the use of man-made, natural, and social capital. The fact that there are three different types of capital that can contribute to economic growth has led to a difference between weak and strong sustainability, as discussed by Pearce and Turner (1990), and Rennings and Wiggering (1997). Weak sustainability describes a situation where it is assumed that the total capital is maintained andRead MoreFinancial Institutions And The Financial System Essay1562 Words   |  7 Pagesfinancial transactions like investments loans and deposits. 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