An Empirical Research on the Effectiveness of Audit Committee - Evidence Based on Audit Fee of Chinese Listed Companies

Taking Chinese A-share listed companies as sample and using the regression analysis method, this paper researches the corporate governance effect of audit committee by examining the relationships between the audit fees and relevant factors. Through analyzing the correlative data, the paper finds that the audit fees are significantly associated with board independence, the number of independent directors, the number of insider directors, and other some factors. It finds further that the relationships are related to the formation of audit committee. The findings support that audit committee improves company's internal control system and promotes external auditor independence, as well as supports the purchase of the higher-quality audit services. At the same time, some interesting results are found and discussed. At last, it points out the conclusion and limitation in this research, and offers a kind of idea and method for the similar research