Title: Does audit quality affect integrated reporting quality? Evidence from South Africa

Authors: Abubakar Ahmed; Nuhu Abubakar; Hafizah Abd-Mutalib; Nor Laili Hassan

Addresses: Department of Accounting, School of Business and Entrepreneurship, American University of Nigeria, Yola, Nigeria ' Department of Accounting, ABU Business School, Ahmadu Bello University Zaria, Kaduna, Nigeria ' Tunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, Changlun, Malaysia ' Tunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, Changlun, Malaysia

Abstract: This article examines the effect of audit quality on integrated reporting quality (IRQ) through the lens of legitimacy theory. Specifically, we examine the effects of industry-specialised auditor and audit fees on IRQ in the context of South African companies. The sample consisted of non-financial companies listed on Johannesburg Stock Exchange (JSE), whose reports are available in <Examples database> provided by the International Integrated Reporting Council (IIRC). The data are analysed using the fixed-effect regression technique. The authors utilised a scoreboard approach and content analysis to measure the extent of <IR> disclosure (IRQ). We find that firms that employ industry-specialised auditors provide higher-quality integrated reports, and audit fees positively influence IRQ. These findings are relevant to firm stakeholders as they demonstrate the importance of external auditors in ensuring the credibility of corporate reports even as these reports expand to cover a broad spectrum of non-financial information.

Keywords: integrated reporting; IRQ; audit quality; specialised auditor; audit fees; South Africa.

DOI: 10.1504/GBER.2024.137621

Global Business and Economics Review, 2024 Vol.30 No.3, pp.311 - 328

Received: 27 Dec 2021
Accepted: 04 Jun 2022

Published online: 02 Apr 2024 *

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