Author

  • Noor Emilina Mohd Nasir

    • Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Terengganu, Kampus Dungun, Malaysia
    • Malaysia

  • Norfadzilah Rashid

    • School of Accountancy, Faculty of Business and Management, Universiti Sultan Zainal Abidin, Terengganu, Malaysia
    • Malaysia

  • Tuan Zafierah Tuan Zainazor

    • School of Accountancy, Faculty of Business and Management, Universiti Sultan Zainal Abidin, Terengganu, Malaysia
    • Malaysia

  • Amirah Husna

    • School of Accountancy, Faculty of Business and Management, Universiti Sultan Zainal Abidin, Terengganu, Malaysia
    • Malaysia

Abstract

In corporate governance, the integrity of financial reporting is fundamental to stakeholder confidence and market efficiency. The quality of audits is crucial in maintaining the integrity of financial accounts. High audit fees typically signify comprehensive audit initiatives and rigorous controls, demonstrating auditors' dedication to identifying and mitigating misstatements in financial reporting. This study examines the impact of financial reporting practices, including earnings management, financial manipulation, and accounting conservatism, on audit quality. This analysis, grounded in agency theory, investigates the impact of audit quality as a governance mechanism on firms' financial reporting strategies, as evidenced by fluctuations in audit fees that signify perceived audit risk and effort. The approach suggests that assertive financial reporting procedures could lead to enhanced audit quality, whilst accounting conservatism might indicate diminished audit risk. This research seeks to establish a theoretical framework for comprehending the relationship between financial reporting behavior and audit quality through the synthesis of existing knowledge. The proposed model offers practical insights for auditors, regulators, and policymakers seeking to reinforce audit effectiveness and enhance financial reporting integrity in an increasingly complex corporate environment. This study emphasizes the significance of audit quality in enhancing company transparency and safeguarding financial integrity.

Keywords

References

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How to Cite

Mohd Nasir, N. E., Rashid, N., Tuan Zainazor, T. Z., & Husna, A. (2025). The Role of Financial Reporting Behavior in Determining Audit Quality. Information Management and Business Review, 17(2(I)S), 69-76. https://doi.org/10.22610/imbr.v17i2(I)S.4566

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Copyright (c) 2025 Noor Emilina Mohd Nasir, Norfadzilah Rashid, Tuan Zafierah Tuan Zainazor, Amirah Husna (Author)

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Research Paper

Published in

Vol. 17 No. 2(I)S (2025) AI in Audit, Workplace Safety & Digital Consumer Society View issue contents

Published

2025-08-10

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