This study aims to investigate the Impact of audit committee characteristics on reducing financial distress and the potential influence on enhancing stock performance in the Egyptian stock exchange. Four characteristics of audit committee were included and studied, they are as follows: Independency, and financial and accounting expertise, and the number of meeting of members of the audit committee, and the size of the audit committee.
A field study, questionnaire survey and interviews have been conducted to collect data from a sample of concerned and related parties: financial managers, internal auditors - in the EGX 100 index companies - (banking industry was not included) plus external auditors, financial analysts of brokerage firms and academics in faculty of accounting departments in Commerce faculties at the Egyptian Universities. The sample size was 197 single, where the data has been collected using questionnaires that were sent to the sample, as well as some Personal interviews with some of the participants. The data were analyzed using descriptive statistics methods which were: the arithmetic average, standard deviation, and coefficient of variation, as well as the Kruskal-Wallis test in order to test study hypotheses.
The results of the statistical analysis shows the following: First, there is a significant positive impact of financial and accounting expertise on audit committee performance. Second, there is a limited significant positive impact of the number of meeting of members of the audit committee on audit committee performance. Third, there is a significant positive impact of audit committee performance and characteristics on reducing financial distress, and that impact is significantly positive with the independency and financial and accounting expertise of audit committee members, and there is Agreement between the views of study sample.
She also explained the results of statistical analysis as follows: Fourth, there is a significant positive impact of audit committee independence and the size of audit committee on audit committee performance. Finally, there is a significant positive impact of both audit committee performance and audit committee characteristic (only financial and accounting expertise) on enhancing stock performance of the listed companies, and there is difference between the views of study sample.
Keywords: Audit Committee Characteristics, Financial Distress, Stock Performance, Egyptian Stock Exchange.
