We examine whether the reputation incentives of audit committee members are associated with their effectiveness in monitoring the financial reporting process. Prior research assumes that audit committee members allocate their effort proportionately across all memberships on which they serve. However, our findings suggest that audit committee members with multiple audit committee memberships tend to focus their attention on the memberships that provide them with the greatest reputation incentives. Specifically, firms with a larger proportion of audit committee members where the membership is the most prominent are associated with higher financial reporting quality and more effective monitoring of internal control. Additional tests reveal that audit committee members' reputation incentives are driving our results rather than independent non‐audit committee members' reputation incentives. We conclude that reputation is a strong incentive for audit committee members, such that it influences their monitoring effectiveness over the financial reporting process.

中文翻译：

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审计委员会成员的声誉激励及其在监控财务报告过程中的有效性

我们检查审计委员会成员的声誉激励是否与其监督财务报告过程的有效性有关。先前的研究假设审计委员会成员在他们所服务的所有成员中按比例分配他们的工作。然而，我们的调查结果表明，拥有多个审计委员会成员的审计委员会成员倾向于将注意力集中在为他们提供最大声誉激励的成员上。具体而言，审计委员会成员比例较大且成员最为突出的公司与更高的财务报告质量和更有效的内部控制监控相关。额外的测试表明审计委员会成员的 声誉激励正在推动我们的业绩，而不是独立非审计委员会成员的声誉激励。我们得出结论，声誉是审计委员会成员的强烈激励，因此它会影响他们对财务报告过程的监督有效性。