Integrated Reporting Items and Agency Cost Reduction: An Analysis of the Role of Audit Quality

Document Type : Research Paper

Authors

1 Accounting and Financial Management Dept., Faculty of Economics and Management, Urmia University, Urmia, Iran

2 Accounting and Financial Management Dept., Faculty of Economics and Management, Urmia University, Urmia, Iran,

Abstract

Today, the "Integrated Reporting", as a new approach, discloses financially and non-financially significant information, explains the relationship between this information, and reduces the information gap. Therefore, the aim of this study is to investigate the impact of integrated reporting quality on agency costs and, on the other hand, to evaluate the mediating role of audit quality in this relationship. Thus, the data of 160 companies listed on the Tehran Stock Exchange in the period 2017 to 2023 were examined using the ordinary least squares approach and Sobel, Aroian, and Goodman tests. The results showe that there is a significant and negative relationship between increasing the quality of integrated reporting and agency costs. Also, there is a significant and positive relationship between increasing the quality of integrated reporting and improving audit quality. In addition, the quality of integrated reporting, through improving audit quality, leads to a reduction in agency costs. Therefore, although none of the Iranian companies have yet adopted integrated reporting, they can reduce agency costs and increase company transparency by improving the quality of financial and non-financial information (integrated reporting categories) through improved auditing.

Keywords

Main Subjects

References

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Journal of Accounting Advances
Volume 17, Issue 1
September 2025
Pages 1-44

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History

  • Receive Date: 12 March 2025
  • Revise Date: 17 June 2025
  • Accept Date: 24 July 2025

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