The impact of the audit committee's characteristics on the financial failure of Industrial companies listed on the Palestine Exchange and Amman Stock Exchange
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Date
2025-09-01
Authors
Mohammed Awad Ali Salman
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Publisher
جامعة النجاح الوطنية
Abstract
This study aims to examine the impact of audit committee characteristics on the financial failure of industrial companies listed on the Palestine and Amman Stock Exchanges. The study's independent variable is the characteristics of the audit committee (AC). It includes committee member independence, the number of members, frequency of meetings, experience, and ownership concentration among committee members. The dependent variable is financial failure, measured using the Altman Z-score model. Additionally, the study includes control variables, which are the return on assets (ROA), leverage, and working capital. Analyze the data descriptive and correlation and A linear regression was employed To test the hypotheses. The study sample consists of industrial companies listed on the Palestine and Amman Stock Exchanges, covering the period from 2018 to 2022. The study found that the number of committee members, the independence of members, the frequency of meetings, and the concentration of member ownership have no impact on the financial failure of companies. The study also found a negative impact on the experience of AC members regarding financial failure; the more experienced the AC members, the less likely the companies are to experience financial failure. Based on the results, the study concluded that the audit committee does not play its role efficiently and effectively in reducing financial failure. companies must adhere to the application of corporate governance rules, laws, regulations, and special instructions when organizing their work. This is especially important for those dealing with the characteristics of the audit committee. Furthermore, attention must be paid to the audit committee and its members because of their important role in maintaining the company. Consequently, this ensures that misleading financial information is not provided to stakeholders, which may lead to decisions that negatively affect the company. Additionally, the existence of an effective audit committee ensures that reliable, credible, and fair financial statements are presented.