Search results

The purpose of this paper is to explore the perceived association between audit rotation (AR) and audit quality (AQ) using respondents from a sample of audit firms operating in a developing economy, the United Arab Emirates (UAE). The paper addresses the following research question: How do UAE auditors perceive the association between various forms of AR and AQ?

The authors collected perception data from a sample of UAE auditors using a questionnaire, and applied several non-parametric statistical techniques to analyze the data, and to answer five exploratory research questions on the perceived association between various forms of AR and AQ.

The findings suggest that the UAE auditors in our sample did not perceive the association between individual types of AR and AQ as significantly different, and that AR in general is essential for AQ improvement and enhances trust in the audit process. Similarly, we find more support for the perception that medium audit tenure is associated with a lower impairment effect on auditor independence. Furthermore, we find no significant differences in perception based on gender, but younger/less experienced professionals and professionals in self-employed practices and small audit firms (compared to other demographics) significantly perceived AR enforceability and AT length to be associated with AQ. Our findings help to enrich our understanding of the perceived AR-AQ association in a relatively new context and less researched audit area in a developing economy.

Although lively debates on the question of AR and AQ within the accounting, finance, investment professions and in the financial media continue, there has been relatively limited knowledge and a dearth of empirical studies on this question in most developing economies. Being the first attempt in the country – the UAE, this study contributes towards addressing this gap in empirical knowledge by exploring the perceived association between various forms of AR and AQ in a developing economy.

This study explores the relation between firm-level climate change risks, measured by carbon emissions and waste generation, and the level of biodiversity disclosures.

Drawing on an international sample from 2009 to 2021, our study employs panel regression models to assess the effects of climate change risks on biodiversity disclosures. We also conduct a range of sensitivity analyses, including additional proxies, endogeneity tests, and alternative samples to examine the robustness of our inferences.

We find that firms with higher carbon emissions and waste generation levels tend to disclose extensive biodiversity information. Furthermore, we provide evidence that the disaggregated components of carbon (Scope 1 and 2) emissions and waste (hazardous and non-hazardous) generation volumes are positively associated with biodiversity disclosures. Our results also reveal that the effects of climate change risks on biodiversity disclosures are stronger for firms from environmentally sensitive industries. Finally, our results show that climate and biodiversity protection regulations appear to be effective in limiting legitimation efforts.

Consistent with legitimacy theory, our findings suggest that high carbon and waste emitting firms tend to utilize increased biodiversity disclosures as a legitimizing tool to conform to societal expectations and protect their legitimacy.

This paper aims to empirically examine the effects of waste management (WM) practices on financial distress (FD) in a heavily regulated environmental context and investigates the moderating role of green initiatives (GINVs) on the WM−FD relationship.

This study uses a sample of 1,667 firm years of UK-based companies from 2002 to 2021 and applies a panel regression analysis controlling for industry- and year-fixed effects. Data on WM, GINVs and governance are sourced from LSEG (formerly known as Refinitiv Asset4 ESG), whereas financial data are collected from WorldScope. The study also adopts alternative measures for FD and WM practices and uses a two-stage least squares analysis and the Heckman selection model as robustness checks.

The findings reveal that FD levels decrease significantly when waste generation declines and waste recycling increases, suggesting that firms with better WM practices have lower FD levels. The results further show the moderating effect of GINVs on the link between waste generation and FD and suggest that increased GINVs are effective in reducing FD by mitigating waste levels. However, waste recycling and GINVs are found to have a substitutive effect on FD. The findings remain robust to the use of alternative measures and endogeneity issues.

This work is among the first to investigate the WM-FD nexus and highlights the importance of effective WM practices in improving the financial sustainability of UK firms. The study also extends prior research by testing the moderating impact of GINVs and suggests that firms need to carefully balance their GINVs with waste recycling efforts to achieve optimal financial sustainability in a heavily regulated environmental context, such as the UK.