Audit quality and firm performance: evidence from SAARC nations

Niva Kalita and Reshma K. Tiwari

International Journal of Accounting, Auditing and Performance Evaluation, 2025, vol. 21, issue 3/4, 422-447

Abstract: This paper provides preliminary evidence of the impact of audit quality on firm performance in the context of South East Asian Association of Regional Co-operation (SAARC) nations. As far as our knowledge transcends, no cross-country empirical work in the SAARC countries ties audit quality with firm performance. According to their market value, the top fifty non-financial listed companies from Bangladesh, India, Pakistan and Sri Lanka are chosen as the sample for the period of 2012-2021. The system generalised method of moment is used to analyse the dynamic panel data. For robustness, generalised estimating equation population-averaged model is employed. The findings suggest a positively insignificant association between auditor size and firm performance. However, a significant positive relationship is established between audit fees and ROA. Furthermore, the analysis suggests a non-linear relationship between audit fee and Tobin's Q, implying that audit fee has a diminishing marginal impact on market value.

Keywords: audit quality; audit fee; Big 4; firm performance; SAARC; South East Asian Association of Regional Co-operation. (search for similar items in EconPapers)
Date: 2025
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