Voting Efficiency and the Even-Odd Effects of Audit Committees on Corporate Earnings Quality

We find that the audit committees with an odd number of directors are associated with better earnings quality than the audit committees with an even number of directors. This relation is more pronounced when the firms have higher R&D expenditure, when the directors in the audit committee have lower ownership, and when the size of the audit committee is smaller. Overall, our findings are consistent with the view that an odd audit committee can improve voting efficiency by better aggregating directors' information and thus enhance the quality of committee decisions, as compared to an even audit committee.