Auditors’ Contribution in Enhancing Non-Quantitative Information Quality

Evangelos Soras (), Stella Zounta and Apostolos G. Christopoulos
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Evangelos Soras: Department of Business Administration, University of the Aegean, 81100 Mitilini, Greece
Stella Zounta: Department of Business Administration, University of the Aegean, 81100 Mitilini, Greece
Apostolos G. Christopoulos: Department of Business Administration, University of the Aegean, 81100 Mitilini, Greece

JRFM, 2025, vol. 18, issue 4, 1-20

Abstract: The purpose of this research is to determine, first, whether an auditor, by conducting a statutory audit of the company’s financial statements, can improve the company’s non-quantitative information quality, and, second, whether the six leading audit firms in Greece improve the non-quantitative information quality more than other, smaller audit firms. The data are primary, arising from the published financial statements for the period from 2019 to 2022 of 84 companies operating in the agricultural supplies sector. These financial statements were retrieved in January 2024 from the General Commercial Registry of Greece. We have reviewed the management reports of these companies to examine their compliance with Greek legislation requirements on non-quantitative information reporting, i.e., on the entity’s performance, business risk management, and environmental and labor issues. We note that non-quantitative information reporting is improving during the period 2019–2022, regardless of the auditor’s involvement. The average reporting scores of audited companies are higher than the corresponding scores of non-audited companies, so the auditors have significantly improved the non-quantitative information reporting. In addition, the reporting scores of companies audited by six leading audit firms are higher than the corresponding scores of companies audited by the other, smaller audit firms.

Keywords: agency theory; audit; financial statements; institutional theory; legitimacy theory; non-quantitative information; stakeholder theory (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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