The role of audit committee in achieving auditing effectiveness: A study on external auditing firms

Many cases of corporate corruption and fradulent financial reporting has shown that auditing has not been done effectively. This has shown that people who do financial reporting and audit this reports have not fulfilled their responsibilities. This study aims to fill the lack of information on this field by showing the role of audit committee in the effective implementation of auditing. For this purpose firms which audit stock exchange registered companies are chosen among the external auditing firms which are members of SPK. A practice has been carried out to determine the extent of contribution of committees responsible for auditing to these firms and the results have been evaluated.In this practice, person to person questionnaire method is chosen. The relevant literature and SPK?s ? Serie X, No: 22 Notice about Capital Market External Auditing Standarts.? is the basis for the questionnaire guestions. The analysis of the collected data is carried out in there stages. First descpriptive statistics about the research is presented. Next factor analysis is performed on a major part of the findings. At the last stage regression analysis is done with acquired factors and other independent variables and the hypotehesis of the study are tested. Results can be summarised as follows: Committee responsible for auditing enforces the establisment of an internal control system and internal auditing unit if there aren?t any and assures the proper function of these. Moreover it functions as a bridge between management, board of directors, internal auditor and external auditor. It reinforces the indepence of the external auditor and increases the effectiveness of external auditing. Also functions as warning mechanism for the risks the company may come across.