An analysis of experience effects on audit committee members' oversight judgments

Abstract

This paper examines whether experience affects audit committee members' oversight judgments. A sample of 87 audit committee members completed an internal control oversight task to evaluate whether experience facilitated comparability with a criterion group of external auditors. The results indicate that both general domain and task specific experience made a significant difference in audit committee members' internal control assessments. Of primary importance, members with experience made internal control judgments more like auditors than did members without experience. Ancillary results reveal that experienced members made more consistent judgments, had higher self-insight, higher consensus, and higher technical content levels for additional items offered than did the members without experience. These findings provide some initial empirical support for suggestions that prior work experience can make a difference in audit committee member oversight and highlight the need for additional research across the diverse range of audit committee tasks.