Impact Of Audit And Remuneration Committee Attributes On Firm Performance: Evidence From Non-Financial Firms Of PSX

Abstract

Purpose The core purpose of study is to empirically analyze the impact of audit and remuneration committee attributes on performance of firm in Pakistan.

Methodology Accordingly, the introducing of PCCG 2012 and 2017 this study focuses on audit and remuneration committee attributes and firm performance by considering the non-financial firms listed in PSX for years of 2012-2018. Randomly, secondary data were collected from annual reports by selecting the 63 firms and regression test is implemented to test the hypothesis through the statistical software SPSS 20.

Originality/Values The value of R square (0.552) and F value (13.179) represent that overall model is fit so audit committee attributes have a positive and also have significant impact on firm performance, return on asset, similarly the value of R square (0.256) and F value (9.437) represent that overall model is fit so audit committee attributes have a positive and also have significant impact on firm performance, return on equity. The value of R square value is (0.452) and F value is (9.944) represent that model is fit so remuneration committee attribute have positive and significant impact on performance of firms return on asset contrarily, remuneration committee attributes have R square value (0.007) and F value (0.480) shows that overall model is not fit so there is insignificant impact on firm performance with return on equity because most of the firms are family owned firm and they do their best for their own self-interest.

Findings and Implications I t is concluded that regulatory authorities should have to clearly define code of corporate governance and role of member having accounting and financial expertise in remuneration and audit committee in order to execute compensation plan and provide the clear financial reports to improve the firm performance of non-financial firms. Study also recommends to firms that they should focus on board busyness to give proper time to firm board, size of board, independent members and stakeholders to increase firm performance.

Keywords: Audit committee attributes, Remuneration Committee Attributes, Firm Performance, Pakistan Stock Exchange