Impact of Attributes of Audit Committee on Productivity of Intellectual Capital (Empirical Evidence from Pakistan)

Abstract

Aim of this research is to find whether there exists an impact of audit committee characteristics on the intellectual capital of banks in the developing country Pakistan. In this study the independent variable audit committee characteristics contain three components that are independence, size, and meetings while the dependent variable is efficiency of intellectual capital which is measured using modified value-added intellectual coefficient (MVAIC) approach and the control variables utilized in the paper are bank specific. The sample contains 28 banks and total number of observations are 308 which contains data for time period 2010 to 2020. Audit committee helps in improving internal control by overseeing management decisions ultimately resulting in enhancing an institutions overall efficiency. The findings of the paper disclosed that there is a significantly positive influence of audit committee characteristics on intellectual capital efficiency of banks. The outcomes deduced from the research could provide further insights on the association between components of audit committee and intellectual capital efficiency which will be of significance for managers in making decisions regarding AC composition in order to increase IC in developing nations.