A Model for Efficacy of audit committee and value relevance of accounting information: Structural equation modeling approach

This study is concerned with exploring the relationship between the efficacy of audit committee and value relevance of accounting information using structural equation modeling. To do so, a sample of 103 firms listed in Tehran Stock Exchange during the years 2013-2016 were selected. The effectiveness of the audit committee (latent variable) is calculated using observable variables such as financial expertise, independence and size of audit committee. Also, the value relevance of accounting information is computed based on Ohlson (1995). Having assured the good fitting of the measurement and structural models of the research, the findings indicate that effectiveness of the audit committee increases the value relevance of earnings and value relevance of book value per share.