THE IMPACT OF AUDIT COMMITTEE FEATURES ON FIRM PERFORMANCE - EMPIRICAL EVIDENCE FROM GCC COUNTRIES

The main aim of this study is to explore the probable impact of audit committee investigation uses a sample of 281 listed firms in the six GCC countries representing 1124 firm-year observations for a period of four financial periods (2019-2022). Findings from both Hierarchical Multiple Regression models suggest that only two out of four independent variables (AC independence and AC financial expertise) explain the firm performance of listed firms in GCC countries. This study makes a valuable contribution to the existing literature by offering a comprehensive analysis of the influence of AC existence and its specific features on firm performance, drawing insights from agency theory and resource dependence theory. By examining these relationships, the study enhances our understanding of the mechanisms through which AC characteristics can impact a firm's success. The findings of this study hold practical implications for businesses and investors. By understanding the impact of AC characteristics on firm performance, businesses can make informed decisions when structuring their audit committees. They can prioritize specific features or attributes that have been found to positively influence firm performance, such as independence, expertise, and financial literacy of AC members. This knowledge can guide businesses in optimizing their governance structures and enhancing their overall performance. The results can be used as a guide by governments and other regulatory bodies for drafting rules pertaining to corporate governance (CG) codes, particularly those that deal with AC creation.