Auditor choice, audit partner busyness, and sustainability reporting quality

Moses Elaigwu, Ayoib Che-Ahmad and Salau Olarinoye Abdulmalik

Afro-Asian Journal of Finance and Accounting, 2023, vol. 13, issue 6, 735-758

Abstract: This paper investigates the effect of auditor choice and audit partner busyness on sustainability reporting quality (SRQ). The study utilises a longitudinal sample of 594 firm-year observations of non-financial PLCs in Malaysia for the periods 2015 to 2017. The results of the panel regression reveal that the choice of BIG4 as an external auditor and audit partner busyness positively and significantly influences SRQ. The positive relationships indicate a slight improvement in the SRQ of firms, but do not amount to a high-quality disclosure. This has policy implications for regulators in terms of strengthening the compliance with the Malaysian sustainability reporting guide and other stakeholders as it has to do with increasing the pressure to improve SRQ. The study bridged literature gaps by offering new insights and empirical evidence on the role of external board governance mechanisms in SRQ.

Keywords: sustainability reporting quality; SRQ; auditor choice; Big4; audit partner busyness; legitimacy theory; stakeholder theory. (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:afasfa:v:13:y:2023:i:6:p:735-758

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