Entrenchment Effect and Audit Quality in Family Business of Pakistan

Tahir, Safdar Husain; Akram, Sadaf; Perveen, Shahida; Ahmad, Gulzar; Ullah, Muhammad Rizwan

doi:10.13106/jafeb.2020.vol7.no8.095

Cited by 8 publications

(14 citation statements)

References 20 publications

(25 reference statements)

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“…Furthermore, audit quality is determined by the auditor's ability to detect possible anomalies and errors in the system and to report on the findings uncovered during his work (Tahir et al, 2020). It is considered as one of the preferred means available to shareholders Integrated reporting, audit quality and management to mitigate the asymmetries of information flowing and emanating between different stakeholders.…”

Section: Audit Quality and Integrated Reportingmentioning

confidence: 99%

“…With regard to the financial scandals that have embellished the doubt on the informational relevance and reliability of integrated reporting. Corporate social responsibility (CSR) has increasingly affected the auditor’s mission, the latter is found in the case of auditing companies that use social responsibility and sustainability reporting (Tahir et al , 2020). As a result, the auditing firm must invest in CSR to easily ensure the extra financial data, as well as the performance toward sustainable development and the maturity of a CSR approach within a company and to verify the implementation of good practices on the part of companies in terms of environmental protection and compliance with the social policy (Goicoechea et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

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Integrated reporting, audit quality: presence of environmental auditing in an international context

Hichri¹

2023

EBR

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Purpose This paper aims to investigate the effect of audit quality and environmental auditing on integrated reporting and the effect of environmental auditing on audit quality. Design/methodology/approach Data was collected from a sample of 300 international companies during the period 2010–2019. The author collected the data from the Thomson Reuters Eikon database, sustainability reports and annual reports. A multiple regression analysis was performed to test the hypotheses. Findings The finding of this study confirms a positive and significant relationship between audit quality and integrated reporting. It is also found that environmental auditing has a positive and significant effect on integrated reporting. Thus, this study found a positive and significant relationship between environmental auditing and audit quality. Practical implications The findings in this paper identify strategies for improving integrated reporting as a crucial element in the processing of financial and nonfinancial information, to help managers and investors and shareholders take a long-term perspective. Therefore, the results encourage companies to invest in economic, environmental and social aspects. This enables accounting professionals, stock exchange authorities and users of environmental and social information to be aware of the factors associated with environmental reporting, to improve the efficiency of those producing the audit service. Originality/value The originality of this study lies in its consideration of a particular aspect of auditing, namely, environmental auditing. However, despite the large body of research on auditing and integrated reporting, to the best of the author’s knowledge, this is the first study to examine the relationship between environmental auditing and integrated reporting. Furthermore, in this research, the author has emphasized the importance of the role played by environmental auditing on audit quality. This design has been neglected in previous studies. Finally, the choice of the field of investigation for the reliability of the data used and the generalization of the results obtained, enables us to make important contributions to the user of the information.

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Section: Audit Quality and Integrated Reportingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Integrated reporting, audit quality: presence of environmental auditing in an international context

Hichri¹

2023

EBR

View full text Add to dashboard Cite

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“…In accordance with the basic principles of agency theory, the independent third party assurance might compensate for the inability of outside shareholders to follow the actions of insiders directly (Forst & Hettler, 2019). Therefore, prior literature recognizes the extent of agency conflicts as the chief factor for audit demand (Anderson et al, 1993;Chow, 1982;Forst & Hettler, 2019;Tahir et al, 2020).…”

Section: Agency Theorymentioning

confidence: 99%

“…Depending on the difference in the shareholding ratio of major shareholders, the gap size between control rights and cash flow rights, and the nature of major shareholders, the conflict between major shareholders and minority shareholders could result in two scenarios: In accordance with the basic tenets of agency theory, the independent third party inspection might compensate for the unfitness of outside shareholders to follow the actions of insiders directly (Forst & Hettler, 2019). Therefore, prior literature recognizes the extent of agency conflicts as the main factor in audit demand (Anderson et al, 1993;Chow, 1982;Forst & Hettler, 2019;Tahir et al, 2020).…”

Section: Csra and Csrr Quality: The Role Of Major Shareholdersmentioning

confidence: 99%

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Does external assurance on CSR reporting contribute to its higher quality? Empirical evidence from China

Pasko

Zhang²,

Bezverkhyi

et al. 2021

Investment Management and Financial Innovations

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This paper examines the difference that the assurance brings to the quality of CSR reports in the Chinese institutional setting, in particular, the difference in quality (proxy – RKS ranking) of assured and unassured CSR reports, as well as whether the high ownership concentration and corresponding to it “entrenchment effect” obstruct the positive impact the assurance exerts on the quality of CSR reports. The paper examines CSR reports on 2,292 firm-year observations of large Chinese companies over three years (2015–2018). The hypothesis development process predicates on the signaling and stakeholder theories, whilst this study applies regression analysis to test the hypotheses. Consistent with the predictions of signaling and stakeholder theories, the paper finds that assurance contributes to the higher quality of CSR reports. Moreover, the study finds that assured CSR reports have higher sub-scores in all four aspects of RKS ranking. However, as ownership concentration exceeds 50 per cent and reaches the majority, it thwarts the advancement in the quality of CSR reports through its assurance. The paper provides an initial empirical account of the role of assurance in the emerging CSR reporting practice in China. The paper contributes to the modest body of empirical research on the function of external assurance in the CSR area by explicating the role played both by the accounting (external assurance) and corporate governance (ownership concentration) infrastructure to ensure high quality of CSR reporting. The paper briefs local, international regulatory authorities and the business community about the importance of external assurance for the CSR reporting quality.

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Exploring integrated reporting's influence on international firms' value relevance

Hichri,

Alqatan

2024

IJOES

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Purpose Analyzing the impact of integrated reporting (IR) on international firms' value relevance, considering diverse information such as income, cash flows, risks, uncertainties and various capitals. Design/methodology/approach This paper used a sample of 300 international companies between 2010 and 2019. This paper collected the data from the Thomson Reuters Eikon database. Quantitative methods were used to test the hypotheses. Furthermore, the feasible generalized least squares (FGLS) method was performed to test the hypotheses. Findings The results suggest that IR and value relevance positively correlate, confirming the hypothesis. Moreover, this paper verified these results by conducting robustness tests on the contribution of the framework and guidelines prepared by the International Integrated Reporting Council (IIRC) in 2013. Practical implications This study enables users to evaluate company transparency and the relevance of disclosed nonfinancial information, providing valuable insights for report preparers and investors seeking profitable opportunities. Originality/value The interest in this research was motivated by the authors’ research field, which is innovative, as few studies have been conducted to explain the relationship between IR and value relevance. Similarly, this paper incorporated into their analysis the importance of the framework created by the IIRC in 2013 in preparing and presenting an integrated report. This paper considered the contribution of this framework to the creation of information content. This design has been overlooked in previous studies. However, this paper mobilized the FGLS method, which has been little used in previous studies.

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Entrenchment Effect and Audit Quality in Family Business of Pakistan

Cited by 8 publications

References 20 publications

Integrated reporting, audit quality: presence of environmental auditing in an international context

Integrated reporting, audit quality: presence of environmental auditing in an international context

Does external assurance on CSR reporting contribute to its higher quality? Empirical evidence from China

Exploring integrated reporting's influence on international firms' value relevance

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