| Summary: | 碩士 === 中原大學 === 會計研究所 === 105 === This article examines the relationship between the Voluntary Establishment of audit committee and Firm’s Cost of Equity by using the listed companies listed on the Taiwan Stock Exchange and the counter trading center from 2007 to 2013 as the research sample. After the revision of the law in 2006, Taiwan has begun to promote the Audit Committee, but is still a voluntary way to promote, not mandatory to set up, so the domestic set of audit committee of the enterprise sample is still low. In this case, it is easy to lead to the problem of sample self-selection bias, so this paper solves this problem by the trend score matching method and uses Nearest-Neighbor Matching Method to pair the samples. Finally, the OLS regression model to explore whether the establishment of the Audit Committee or not, will affect the cost of equity funds.
The empirical results found that there are companies that set up an audit committee, whose equity funds are less costly. The company that has set up an audit committee, through the independence and professionalism of the audit committee, can enhance the overall decision-making quality and decision-making efficiency of the company and will effectively monitor the function. Financial reporting quality is good, investors bear the information risk reduction, the company''s equity capital costs can also be reduced.
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