The effects of ownership structure and board composition on the audit committee activityspan-ish evidence

Résumé

This paper examines the factors that affect the activity of the audit committees. The data used in the analyses are collected from the Spanish stock market in 2003. We use the activity of the audit committee as a proxy of its efficacy. The results show the existence of a non-linear relationship between the managerial stock ownership and the activity of the audit committee. We have also verified the existence of a lower audit committee’s activity in highly leveraged firms and when the ownership structure is concentrated in the hands of large shareholders. The large firms have more active committees than small firms. Finally, we have not found any evidence of a significant influence of the composition of the board or the audit committee on the activity of the latter.