Journal
BUSINESS STRATEGY AND THE ENVIRONMENT
Volume 30, Issue 1, Pages 522-534Publisher
WILEY
DOI: 10.1002/bse.2635
Keywords
agency theory; audit committee; disclosure; integrated reporting
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This study examined the impact of audit committee attributes on integrated reporting quality (IRQ) from an agency theory perspective. The results showed that the size, independence, and meeting frequency of the audit committee have a positive effect on IRQ, while financial expertise does not have a significant impact.
The limits of financial disclosure in meeting the investors' needs have led to the request for reporting frameworks capable of incorporating information of different nature. Integrated reporting (IR), which is the latest novelty in organisational reporting practice, promises to bring together material financial and non-financial information. IR has received considerable academic attention in recent years. However, little attention has been paid to the role of the audit committee in IR processes, despite the influence that this body has on disclosure, thanks to its supervisory and monitoring functions. This study bridges this gap by analysing the effect of the audit committee attributes on integrated reporting quality (IRQ) from an agency theory perspective. The regression analysis, conducted on a sample of 125 international firms, demonstrated a positive effect of size, independence and meeting frequency of the audit committee on IRQ and a non-significant effect of financial expertise.
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