The main objective of this study is to empirically investigate whether the audit committee (AC) attributes and the quality of external auditor are associated with financial reporting quality (FRQ) of companies listed on the gulf cooperation council (GCC) countries' stock markets. To achieve the study's objectives, data was collected from a sample of 115 companies from four GCC countries during the period from 2017-2019 that represents 345 firm-year observations. Five hypotheses were tested, FRQ as dependent variable was regressed with five independent variables. For measuring the FRQ, the author adopted the qualitative approach using checklist developed by Beest, et al. 2009 sponsored by Nijmegen Center for Economics (NiCE) with limited modification based on the new amendments of IASB conceptual framework in 2018. The study findings reveal that the level of FRQ on the study sample averaged 63% while the minimum and the maximum valued 40% and 86% respectively. The findings indicate that FRQ are positively and significantly associated with the four AC attributes and quality of external auditor so, all hypotheses are accepted, which infer that FRQ will be enhanced if a company formed AC having, bigger size, more independence, financial experience, meetings frequently, and hiring high quality external auditor.
The findings of this study have wide implications to all stakeholders especially, investors, creditors, auditors, management, in addition to stock markets regulators and standard-sitting bodies for the role of AC attributes and external auditor on improving FRQ