Audit Committee and Entropy of financial Statements

Changes in information available on corporate financial statements are critical to investors as one of the most important sources of information for decision making. As much as the range of financial statement items changes, it indicates the risk of information. In this paper, for the first time, the relationship between the audit committee and the entropy of financial statements has been investigated in listed companies in Tehran Stock Exchange. For this purpose, the data for 80 companies (320 years-companies) have been investigated in the years 2012 to 2015. The hypothesis test has been performed through ordinary least squares multivariate regression. The measurement of audit committee through variables of size, expertise and independence of audit committee and changes in financial statements by entropy and continuum entropy variables of Renny. The results show a decrease in the entropy of financial statements when the independence of the audit committee increases. Also, the strength test of the findings of this research shows that regardless of the size of companies, this relationship exists in the companies listed in TSE.