Does Corporate Governance Affect the Diligence of Audit Committee?

Diligence is the most important factor in measuring the efficiency of audit committee. We hold that corporate governance may have an effect on the diligence of audit committee. The companies, which are still publicly listed in A share market of Shanghai Stock Exchange by the end of 2007, are the subject of study. This paper examines whether corporate governance could affect the diligence of audit committee. Empirical study shows that the size of audit committee and proportion of the first majority shareholder's share can significantly enhance the diligence. This research will not only help people understand the effect of corporate governance in depth but help people reasonably establish a corporate governance structure to enhance the diligence of audit committee.