IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v89y2024ipap1203-1216.html
   My bibliography  Save this article

The role of audit quality in waste management behavior

Author

Listed:
  • Saeed, Asif
  • Zafar, Muhammad Wasif
  • Manita, Riadh
  • Zahid, Noor

Abstract

The entire world is facing the issue of climate change. Due to rapid industrialization, enormous waste generation is aggravating the situation. In this study, we investigate the role of audit quality in promoting sustainable waste management in firms. Using a sample of 8100 firm-year observations for the period 2002–2017 from 34 countries, we provide novel empirical evidence that good audit quality significantly reduces total corporate waste production. Further, our results are robust to alternate proxies of audit quality, and waste management, and only appear with unqualified audit reports. To alleviate the endogeneity issue, we use two different identification strategies; namely, PSM and GMM. Altogether, these findings demonstrate that Big4 auditing firms ensure the credibility and reliability of the non-financial disclosures of their auditees as apparent by their rigorous auditing processes. Moreover, the main implication of our study is that firms are subject to a decrease in their overall waste production when their external assurer is one of the BIG4 auditing firms.

Suggested Citation

  • Saeed, Asif & Zafar, Muhammad Wasif & Manita, Riadh & Zahid, Noor, 2024. "The role of audit quality in waste management behavior," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1203-1216.
    • Handle: RePEc:eee:reveco:v:89:y:2024:i:pa:p:1203-1216
    DOI: 10.1016/j.iref.2023.08.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056023003404
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2023.08.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ali Uyar & Cemil Kuzey & Merve Kilic & Abdullah S. Karaman, 2021. "Board structure, financial performance, corporate social responsibility performance, CSR committee, and CEO duality: Disentangling the connection in healthcare," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1730-1748, November.
    2. Olga Hawn & Ioannis Ioannou, 2016. "Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2569-2588, December.
    3. Asif Saeed & Ammar Ali Gull & Asad Ali Rind & Muhammad Shujaat Mubarik & Muhammad Shahbaz, 2022. "Do socially responsible firms demand high‐quality audits? An international evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2235-2255, April.
    4. Anissa Dakhli, 2021. "The impact of corporate social responsibility on firm financial performance: does audit quality matter?," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 23(5), pages 950-976, December.
    5. Leona Aimée Henry & Tine Buyl & Rob J.G. Jansen, 2019. "Leading corporate sustainability: The role of top management team composition for triple bottom line performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(1), pages 173-184, January.
    6. Meppem, Tony & Gill, Roderic, 1998. "Planning for sustainability as a learning concept," Ecological Economics, Elsevier, vol. 26(2), pages 121-137, August.
    7. Xuan-Hung Nguyen & Hiep-Thien Trinh, 2020. "Corporate social responsibility and the non-linear effect on audit opinion for energy firms in Vietnam," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1757841-175, January.
    8. Boubaker, Sabri & Cellier, Alexis & Manita, Riadh & Saeed, Asif, 2020. "Does corporate social responsibility reduce financial distress risk?," Economic Modelling, Elsevier, vol. 91(C), pages 835-851.
    9. Ammar Ali Gull & Muhammad Atif & Tanveer Ahsan & Imen Derouiche, 2022. "Does waste management affect firm performance? International evidence," Post-Print hal-03866049, HAL.
    10. Muhammad Nadeem & Stephen Bahadar & Ammar Ali Gull & Umer Iqbal, 2020. "Are women eco‐friendly? Board gender diversity and environmental innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3146-3161, December.
    11. Rick Hardcopf & Rachna Shah & Suvrat Dhanorkar, 2021. "The Impact of a Spill or Pollution Accident on Firm Environmental Activity: An Empirical Investigation," Production and Operations Management, Production and Operations Management Society, vol. 30(8), pages 2467-2491, August.
    12. Alam, Md. Samsul & Atif, Muhammad & Chien-Chi, Chu & Soytaş, Uğur, 2019. "Does corporate R&D investment affect firm environmental performance? Evidence from G-6 countries," Energy Economics, Elsevier, vol. 78(C), pages 401-411.
    13. Maretno Harjoto & Hoje Jo & Yongtae Kim, 2017. "Is Institutional Ownership Related to Corporate Social Responsibility? The Nonlinear Relation and Its Implication for Stock Return Volatility," Journal of Business Ethics, Springer, vol. 146(1), pages 77-109, November.
    14. Ammar Ali Gull & Asif Saeed & Muhammad Tahir Suleman & Rizwan Mushtaq, 2022. "Revisiting the association between environmental performance and financial performance: Does the level of environmental orientation matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1647-1662, September.
    15. Yasir Shahab & Ammar Ali Gull & Asad Ali Rind & Aitzaz Ahsan Alias Sarang & Tanveer Ahsan, 2022. "Do corporate governance mechanisms curb the anti-environmental behavior of firms worldwide? An illustration through waste management," Post-Print hal-03602986, HAL.
    16. Gull, Ammar Ali & Atif, Muhammad & Ahsan, Tanveer & Derouiche, Imen, 2022. "Does waste management affect firm performance? International evidence," Economic Modelling, Elsevier, vol. 114(C).
    17. Faizul Haque & Collins G Ntim, 2018. "Environmental Policy, Sustainable Development, Governance Mechanisms and Environmental Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 27(3), pages 415-435, March.
    18. Dietrich Earnhart & Donna Ramirez Harrington, 2021. "Effects of audit frequency, audit quality, and facility age on environmental compliance," Applied Economics, Taylor & Francis Journals, vol. 53(28), pages 3234-3252, June.
    19. Lukas Timbate & Cheong Kyu Park, 2018. "CSR Performance, Financial Reporting, and Investors’ Perception on Financial Reporting," Sustainability, MDPI, vol. 10(2), pages 1-16, February.
    20. Belen Fernandez‐Feijoo & Silvia Romero & Silvia Ruiz, 2018. "Financial Auditor and Sustainability Reporting: Does it matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(3), pages 209-224, May.
    21. Won-Yong Oh & Jongseok Cha & Young Kyun Chang, 2017. "Does Ownership Structure Matter? The Effects of Insider and Institutional Ownership on Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 146(1), pages 111-124, November.
    22. Dima Jamali & Asem M. Safieddine & Myriam Rabbath, 2008. "Corporate Governance and Corporate Social Responsibility Synergies and Interrelationships," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(5), pages 443-459, September.
    23. Zeeshan Mahmood & Rehana Kouser & Waris Ali & Zubair Ahmad & Tahira Salman, 2018. "Does Corporate Governance Affect Sustainability Disclosure? A Mixed Methods Study," Sustainability, MDPI, vol. 10(1), pages 1-20, January.
    24. Nazim Hussain & Ugo Rigoni & René P. Orij, 2018. "Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance," Journal of Business Ethics, Springer, vol. 149(2), pages 411-432, May.
    25. Lu, Jing & Wang, Jun, 2021. "Corporate governance, law, culture, environmental performance and CSR disclosure: A global perspective," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 70(C).
    26. repec:eme:marpps:10222529200900009 is not listed on IDEAS
    27. Christian M. Faller & Dodo zu Knyphausen-Aufseß, 2018. "Does Equity Ownership Matter for Corporate Social Responsibility? A Literature Review of Theories and Recent Empirical Findings," Journal of Business Ethics, Springer, vol. 150(1), pages 15-40, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gull, Ammar Ali & Ahsan, Tanveer & Qureshi, Muhammad Azeem & Mushtaq, Rizwan, 2023. "Striving to safeguard shareholders or maintain sustainability in periods of high uncertainty: A multi-country evidence," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    2. Ajab Khan & H. Kent Baker, 2022. "How board diversity and ownership structure shape sustainable corporate performance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3751-3770, December.
    3. Gull, Ammar Ali & Atif, Muhammad & Ahsan, Tanveer & Derouiche, Imen, 2022. "Does waste management affect firm performance? International evidence," Economic Modelling, Elsevier, vol. 114(C).
    4. Jennifer Martínez-Ferrero & María-Belén Lozano, 2021. "The Nonlinear Relation between Institutional Ownership and Environmental, Social and Governance Performance in Emerging Countries," Sustainability, MDPI, vol. 13(3), pages 1-16, February.
    5. Patrick Velte & Martin Stawinoga, 2020. "Do chief sustainability officers and CSR committees influence CSR-related outcomes? A structured literature review based on empirical-quantitative research findings," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(4), pages 333-377, December.
    6. Muhammad Kaleem Khan & R. M. Ammar Zahid & Adil Saleem & Judit Sági, 2021. "Board Composition and Social & Environmental Accountability: A Dynamic Model Analysis of Chinese Firms," Sustainability, MDPI, vol. 13(19), pages 1-18, September.
    7. Francesca Gennari, 2019. "How to Lead the Board of Directors to a Sustainable Development of Business with the CSR Committees," Sustainability, MDPI, vol. 11(24), pages 1-17, December.
    8. Shoaib Aslam & Mohamed H. Elmagrhi & Ramiz Ur Rehman & Collins G. Ntim, 2021. "Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1655-1673, May.
    9. Shahbaz, Muhammad & Karaman, Abdullah S. & Kilic, Merve & Uyar, Ali, 2020. "Board attributes, CSR engagement, and corporate performance: What is the nexus in the energy sector?," Energy Policy, Elsevier, vol. 143(C).
    10. López-Cabarcos, M. Ángeles & Piñeiro-Chousa, Juan & Quiñoá-Piñeiro, Lara & López-Pérez, M. Luisa, 2024. "Water and waste management strategies as drivers of the financial performance of food companies," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    11. Hamzeh Al Amosh & Saleh F. A. Khatib, 2021. "Corporate governance and voluntary disclosure of sustainability performance: the case of Jordan," SN Business & Economics, Springer, vol. 1(12), pages 1-22, December.
    12. Saeed, Asif & Alnori, Faisal & Yaqoob, Gohar, 2023. "Corporate social responsibility, industry concentration, and firm performance: Evidence from emerging Asian economies," Research in International Business and Finance, Elsevier, vol. 64(C).
    13. Ammar Ali Gull & Nazim Hussain & Sana Akbar Khan & Zaheer Khan & Asif Saeed, 2023. "Governing Corporate Social Responsibility Decoupling: The Effect of the Governance Committee on Corporate Social Responsibility Decoupling," Journal of Business Ethics, Springer, vol. 185(2), pages 349-374, June.
    14. Nurlan Orazalin & Mady Baydauletov, 2020. "Corporate social responsibility strategy and corporate environmental and social performance: The moderating role of board gender diversity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1664-1676, July.
    15. Emmanuel Anyigbah & Yusheng Kong & Bless Kofi Edziah & Ahotovi Thomas Ahoto & Wilhelmina Seyome Ahiaku, 2023. "Board Characteristics and Corporate Sustainability Reporting: Evidence from Chinese Listed Companies," Sustainability, MDPI, vol. 15(4), pages 1-26, February.
    16. Ali Uyar & Cemil Kuzey & Merve Kilic & Abdullah S. Karaman, 2021. "Board structure, financial performance, corporate social responsibility performance, CSR committee, and CEO duality: Disentangling the connection in healthcare," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1730-1748, November.
    17. Francesco Gangi & Mario Mustilli & Lucia Michela Daniele & Maria Coscia, 2022. "The sustainable development of the aerospace industry: Drivers and impact of corporate environmental responsibility," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 218-235, January.
    18. Kaouther Chebbi & Mohammed Abdullah Ammer, 2022. "Board Composition and ESG Disclosure in Saudi Arabia: The Moderating Role of Corporate Governance Reforms," Sustainability, MDPI, vol. 14(19), pages 1-25, September.
    19. Isabel‐Maria García‐Sánchez & Nazim Hussain & Sana Akbar Khan & Jennifer Martínez‐Ferrero, 2020. "Managerial entrenchment, corporate social responsibility, and earnings management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1818-1833, July.
    20. Nurlan Orazalin, 2020. "Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 140-153, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:89:y:2024:i:pa:p:1203-1216. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.