Exploring the complexity associated with audit committees' work
: maximising effectiveness of audit committees in FTSE 350 companies

  • Jamal Ali Zaid Al Jahwari

Traethawd ymchwil myfyriwr: Traethawd Ymchwil DoethurolDoethur mewn Athroniaeth


The research aims to identify the current challenges faced by audit committees within the FTSE 350. It also aims to explore the complexity associated with boosting the effectiveness of audit committees. This is in contrast to the prevailing approach in the current literature which oversimplifies the challenges faced by audit committees and fails to recognise the complexity of the audit committee environment. The research employs a qualitative approach in the form of semi-structured interviews, observation of formal audit committee meetings and content analysis of related documents such as the UK code of governance and committees’ terms of reference. The use of three methods for collecting primary and secondary data makes it possible to triangulate the findings and achieve more valid and reliable findings. It also makes it possible to gain greater in-depth knowledge of the complexity inherent to committee effectiveness and, therefore, to offer a better and more comprehensive account of it. The research also uses the Cynefin framework to assess audit committee challenges. This enables the researcher to categorize challenges in terms of four different types: simple/obvious, complicated, complex and chaotic. On the basis of this, the research is able to propose the most appropriate means of maximising the effectiveness of audit committees. Prior studies examine the effectiveness of audit committees mainly with a focus on the challenges involved in improving the quality of financial statements published by public listed companies. However, this research finds that the audit committees of FTSE 350 companies face a range of challenges concerning issues beyond the quality of financial reporting. Concretely, this research identifies 27 challenges faced by these committees. It also finds that most of these challenges arise in a complex domain and that the most serious of these is the danger of missing the big picture. By drawing upon complexity theory, this research identifies seven patterns which FTSE 350 audit committees can implement to overcome the challenges they currently face. In doing so, they can minimise the likelihood that committees miss the big picture and, therefore, maximise their effectiveness. The seven patterns are: having a clear sense of purpose and a clear understanding of committee roles; a mixture of the right people; effective teamwork; good leadership; appropriate training; maintaining a good culture; and an adequate evaluation process. By contrast with prior studies, this research goes beyond the issue of financial reporting to examine the ways in which audit committees might maximise their effectiveness in dealing with the multiple and complex challenges they face. It argues that, by implementing the seven identified patterns, they can minimise the likelihood of corporate collapses such as those of Carillion and Patisserie Valerie.
Dyddiad Dyfarnu2021
Iaith wreiddiolSaesneg
Sefydliad Dyfarnu
  • Prifysgol Aberystwyth
GoruchwyliwrNerys Fuller-Love (Goruchwylydd) & Ian Birchmore (Goruchwylydd)

Dyfynnu hyn