Prior research has indicated that
the effectiveness of these audit committees has an important effect on the corporate
governance process within an organization. In a Canadian study, Goh (2009) found
the effectiveness of a firm’s independent audit committee to be associated with that
firm’s timeliness in remediating material weaknesses in internal control, thereby
helping to improve financial reporting quality and, ultimately, enhancing corporate
governance.
In view of the demonstrated significance of the audit
committee effectiveness variable, the following hypothesis is proposed: