Table 5 presents the results of our original model except that the percentage of affiliated directors on the audit committee is split into two components: the percentage of inside directors (INSIDE), and the percentage of gray directors (GRAY). As expected, there is a significant negative relation between the percentage of inside directors on the audit committee and the receipt of a going-concern report (p < 0.01). Table 5 also reveals a significant negative relation between the percentage of gray directors and the receipt of a going-concern report (p < 0.01), consistent with regulators’ concern that led the BRC to recommend that all audit committee members be completely independent of management