AUDIT COMMITTEE CHARACTERISTICS AND PERFORMANCE OF BANKS IN THE KINGDOM OF SAUDI ARABIA: THE MODERATING EFFECT OF ENVIRONMENTAL DISCLOSURE

Abstract

This study examines the effect of audit committee financial expertise and its independence on the performance of Saudi Arabian banks. In addition, the paper assesses the moderating effect of Environmental Disclosure (ED) on the association between audit committee characteristics and bank performance. The study’s sample was drawn from banks listed on the Saudi Stock Exchange (SSE) between 2016 and 2020. Descriptive statistics and correlation analysis were applied to the collected data. The results suggested that audit committee independence and financial knowledge of audit committees positively affect bank performance in KSA. Moreover, ED moderated the relationship between audit committee independence and bank performance in KSA, as well as the relationship between financial knowledge of audit committees and bank performance in KSA. In future studies, the researchers propose using alternative accounting metrics and market measurements to provide a more complete picture of a firm’s performance than conventional accounting measures.