Factors Affecting the Formation of Audit Committees in Major UK Listed Companies

Abstract

Abstract This research investigates the proposition that there are differences between companies which have voluntarily formed audit committees and those which have not. The results of univariate and multivariate tests reveal statistically significant differences between the two groups for variables representing: (i) agency costs of equity, (ii) agency costs of debt, and (iii) director pressure to reduce information asymmetries.