Please use this identifier to cite or link to this item:
Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Sustainability reporting quality and post-audit financial reporting quality: Empirical evidence from the UK
Author(s): Al-Shaer, Habiba
Contact Email:
Keywords: audit effort
financial reporting
sustainability reporting
sustainable strategy
Issue Date: Sep-2020
Date Deposited: 26-Feb-2024
Citation: Al-Shaer H (2020) Sustainability reporting quality and post-audit financial reporting quality: Empirical evidence from the UK. <i>Business Strategy and the Environment</i>, 29 (6), pp. 2355-2373.
Abstract: This study examines whether firms that appear to exhibit high sustainability reporting quality are less likely to engage in earnings management activities, thereby delivering financial information that is more transparent and reliable than that delivered by firms that do not produce high-quality sustainability reports. I also investigate whether the association between sustainability reporting quality and post-audit financial reporting quality is conditional on audit effort. Analysis of data drawn from FTSE 350 companies covering 2007 to 2018 indicates that firms that produce high-quality sustainability reports are significantly and negatively associated with earnings management metrics. More importantly, this association is moderated by audit effort, measured by audit fees, suggesting that sustainability reporting quality reflects factors considered by auditors in their audit risk assessment practices. These results remain robust after several sensitivity analyses. I conclude that firms that devote more resources to producing high-quality sustainability reports are likely to demonstrate an overall commitment to quality that alleviates auditors' concerns about the opportunistic use of sustainability reporting and reduces business risk, thereby reducing the effort auditors expend to verify financial reports.
DOI Link: 10.1002/bse.2507
Rights: © 2020 The Author. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
Licence URL(s):

Files in This Item:
File Description SizeFormat 
Bus Strat Env - 2020 - Al___Shaer - Sustainability reporting quality and post___audit financial reporting quality Empirical.pdfFulltext - Published Version11.85 MBAdobe PDFView/Open

This item is protected by original copyright

A file in this item is licensed under a Creative Commons License Creative Commons

Items in the Repository are protected by copyright, with all rights reserved, unless otherwise indicated.

The metadata of the records in the Repository are available under the CC0 public domain dedication: No Rights Reserved

If you believe that any material held in STORRE infringes copyright, please contact providing details and we will remove the Work from public display in STORRE and investigate your claim.