THE RELATIONSHIP BETWEEN AUDIT COMMITTEE EFFECTIVENESS AND FINANCIAL REPORTING QUALITY AMONG FAMILY AND NON-FAMILY-OWNED COMPANIES IN THE SULTANATE OF OMAN

Authors: Muneer Rajab Amrah, Mohammed Mahdi Obaid & Marwan Yahaya Alzubidi

ABSTRACT

This study aims to examine the relationship between audit committee effectiveness and financial reporting quality among family and non-family-owned companies in the Sultanate of Oman. This study uses a panel dataset for 62 companies listed on the Muscat Securities Market for 4 years from 2021 to 2024. The study contributes to its literature by extending previous financial reporting quality with consideration of the Sultanate of Oman business environment where family ownership control is more common. Additionally, this study is based on the difference between family and non-family-owned firms with Type I and Type II agency problems, with differences in ownership and control, this study further contributes to the literature by examining the influences of the audit committee effectiveness on its financial reporting quality, which is expected to be different between family and non-family firms. The empirical results indicate that the association between audit committee effectiveness and its financial reporting quality is positive and significant for both, the full sample as well as the non-family firms. However, this relationship appears to be weaker for family firms.

Keywords: audit committee effectiveness, financial reporting quality, family and non-family firms, Oman.

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