Implications of sustainability reporting and institutional investors’ ownership for external audit work: evidence from Saudi Arabia
Journal of Financial Reporting and Accounting
ISSN: 1985-2517
Article publication date: 31 July 2023
Abstract
Purpose
This study aims to assess whether non-financial corporate social responsibility (CSR) information decreases audit risk and audit scope and enables speedier completion of audit reports. The study also investigates whether institutional investors’ ownership (IIO) has an influence on the association between CSR disclosures and audit report lag (ARL).
Design/methodology/approach
This study uses a sample of 154 Saudi firms over 2016–2021 (837 observations) and applies ordinary least square regression to examine the study hypotheses.
Findings
This study’s results show that ARL is significantly shorter for firms with higher CSR disclosures. Furthermore, the findings show that IIO has no significant impact on the association between CSR disclosures and ARL.
Originality/value
This study offers new insights into how auditors respond to CSR disclosures and whether institutional investor monitoring influences the audit process in an emerging economy.
Keywords
Acknowledgements
The authors sincerely thank the Saudi Capital Market Authority for its full financial support, which has been indispensable in conducting this research and achieving meaningful insights.
Funding: This research funded by: Capital Market Authority – Research Agenda H2 2021.
Citation
Qasem, A., Wan-Hussin, W.N., Al-Qadasi, A.A., Ghaleb, B.A.A. and Bamahros, H.M. (2023), "Implications of sustainability reporting and institutional investors’ ownership for external audit work: evidence from Saudi Arabia", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-02-2023-0097
Publisher
:Emerald Publishing Limited
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