Does internal audit matter? Audit committee, its attributes, and corporate social responsibility reporting quality

  • 412 Views
  • 112 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

This study explores the nexus between internal audit, audit committee attributes, and Corporate Social Responsibility (CSR) disclosure quality in A-share listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2019. Utilizing refined samples and robust datasets, this investigation reveals critical insights that a robust internal control system significantly correlates with higher-quality CSR disclosure, underscoring its pivotal role in safeguarding non-financial reporting integrity and enhancing transparency in CSR disclosures. Larger audit committees are positively associated with improved CSR disclosure quality. This highlights the strategic advantage of a diverse and expansive audit committee in navigating the complexities of CSR reporting. Contrary to expectations, the proportion of independent directors on the audit committee and the frequency of audit committee meetings do not show a significant positive relationship with CSR disclosure. Companies benefit from strategic investments in internal control systems, crucial for non-financial reporting integrity and fortified CSR disclosure practices. In conclusion, this study provides concise insights into critical factors influencing CSR disclosure quality in Chinese companies, offering actionable implications for corporate practices and regulatory frameworks.

Acknowledgment
This paper is co-funded by the European Union through the European Education and Culture Executive Agency (EACEA) within the project “EU BEST PRACTICE OF LIFE CYCLE ASSESSMENT, SOCIAL, ENVIRONMENTAL ACCOUNTING AND SUSTAINABILITY REPORTING” – 101047667-ERASMUS-JMO-2021-MODULE https://jm.snau.edu.ua/en/eu-best-practice-of-life-cycle-assessment-social-envi­ron­mental-accounting-and-sustainability-reporting/
Oleh Pasko expresses sincere gratitude for the support from the Kirkland Research Program, generously provided by the Leaders of Change Foundation established by the Polish-American Freedom Foundation.

view full abstract hide full abstract
    • Table 1. Sampling
    • Table 2. Descriptive statistics
    • Table 3. Correlations matrix
    • Table 4. Regression analysis IV
    • Table A1. Prior studies on the relationship between internal audit and CSR reporting quality
    • Table A2. Variable definitions
    • Table A3. Regression analysis I
    • Table A4. Regression analysis II
    • Table A5. Regression analysis III
    • Conceptualization
      Oleh Pasko, Li Zhang
    • Methodology
      Oleh Pasko, Li Zhang, Nelia Proskurina
    • Project administration
      Oleh Pasko
    • Supervision
      Oleh Pasko, Li Zhang
    • Writing – original draft
      Oleh Pasko, Li Zhang, Nelia Proskurina, Natalia Ryzhikova, Yelyzaveta Mykhailova
    • Writing – review & editing
      Oleh Pasko
    • Data curation
      Li Zhang
    • Formal Analysis
      Li Zhang, Nelia Proskurina, Natalia Ryzhikova, Yelyzaveta Mykhailova
    • Investigation
      Li Zhang, Nelia Proskurina, Natalia Ryzhikova, Yelyzaveta Mykhailova
    • Visualization
      Li Zhang, Nelia Proskurina, Natalia Ryzhikova, Yelyzaveta Mykhailova
    • Validation
      Nelia Proskurina, Natalia Ryzhikova, Yelyzaveta Mykhailova