THE EFFECT OF AUDIT COMMITTEE CHARACTERISTICS ON FINANCIAL REPORTING QUALITY WITH THE MODERATING ROLE OF AUDIT QUALITY

Abstract

The underlying objective of this study is to examine the influence of Audit Committee (AC) characteristics on Financial Reporting Quality (FRQ) with the moderating role of Audit Quality (AQ). The sample consists of 278 non-financial listed companies on the Pakistan Stock Exchange (PSX). The data was collected from 2014 to 2023, making it 2780 firm-year observations. For data analysis, the panel regression technique was utilised along with some additional analysis. The results of hypothesis testing revealed that the characteristics of AC have a positive and significant relationship with FRQ. The moderator AQ positively moderates the relationship between AC characteristics and FRQ. Through the results of this study, the significance of quality reporting and governance is communicated to policymakers, non-financial companies, regulatory bodies, and stakeholders.