Volume 16 Issue 3, December 2021

 

ARTICLE INFO
Article History:
Received: 5 February 2021
Accepted: 26 July 2021
Published: 1 December 2021

ASIA-PACIFIC MANAGEMENT ACCOUNTING JOURNAL. VOL. 16 ISSUE 3

DO THE ATTRIBUTES OF AUDIT COMMITTEE EXPLAIN NON-PERFORMING LOANS? EVIDENCE FROM AN EMERGING ECONOMY

Arifa Akter, Mohammad Kamal Hossain*, Mohammad Jahangir Alam and Md. Shajul Islam 

Department of Accounting and Information Systems,
Jashore University of Science and Technology, Bangladesh

 

ABSTRACT

This study examined whether various attributes of the audit committee of listed banks in Bangladesh explain the level of non-performing loans (NPLs). This study used a panel data set comprising all 30 listed banks with 250 bank-year observations for the period 2013–2017. It employed the random-effects GLS regression model with cluster robust standard error and AR (1) disturbance to examine the effect of several audit committee attributes on NPLs. We found that holding audit committee meetings frequently and a higher number of independent members in the audit committee facilitate to reduce NPLs. We, however, find no explicit evidence that the other attributes of the audit committee examined (audit committee size, financial experience and financial literacy of the audit committee members, professional qualifications of the audit committee Chairman) contribute in reducing NPLs. The findings will be useful for policymakers of the banking sector in Bangladesh and the relevant regulatory bodies in enabling them to understand the role of the various attributes of the audit committee in the incidence of NPLs.

Keywords: attributes, audit committee, non-performing loans (NPLs), listed   banks, Bangladesh

* Corresponding Author: Mohammad Kamal Hossain. Email: This email address is being protected from spambots. You need JavaScript enabled to view it.