The effectiveness of the audit committee and risk taking of banks

The audit committee must be independent from the management of the organization in order to fulfill its supervisory role and protect the interests of the shareholders. On the other hand, considering that the audit committee is one of the corporate management mechanisms, it plays a fundamental role in monitoring and managing the quality of information of business units. Therefore, effective audit committee members will be able to prevent the management from manipulating the financial results. Accordingly, this research seeks to investigate the relationship between the effectiveness of the audit committee and the risk-taking of banks. In this research, the number of 13 banks admitted to the Tehran Stock Exchange in the period of 2011-1400 has been examined. In order to test the hypotheses, panel linear and logistic nonlinear regression models were used, the findings of the research show that there is a negative and significant relationship between the effectiveness of the audit committee with the standard deviations of return on assets and the ratio of non-current facilities to total facilities. However, there is no significant relationship between the effectiveness of the audit committee and Altman's bankruptcy risk.