Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/266664 
Year of Publication: 
2022
Citation: 
[Journal:] International Journal of Auditing [ISSN:] 1099-1123 [Volume:] 26 [Issue:] 4 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2022 [Pages:] 446-466
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
Several calls from practitioners and the relevant literature suggest that audit committee directors with industry expertise complement the knowledge of financial experts. Thus, this study examines market reactions to the voluntary appointment of new audit committee directors with financial and industry expertise in Germany. Using hand‐collected German data on newly appointed audit committee director announcements, we find a significantly positive market reaction around the appointment of financial experts with industry expertise but no reaction around the appointment of financial experts without industry expertise. Consistent with the expectation that some industries demand a higher need for specialised directors, we find a positive market reaction to the appointment of financial experts with industry expertise depending on whether the appointing firm is relatively more challenging for non‐industry experts to monitor and advise. Overall, our findings suggest that market participants demand a combination of financial and industry expertise.
Subjects: 
audit committee
boards of directors
corporate governance
financial expertise
industry expertise
market reaction
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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