Audit committee effectiveness, internal audit function and sustainability reporting practices
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Date
2021
Journal Title
Journal ISSN
Volume Title
Publisher
Asian Journal of Accounting Research
Abstract
The purpose of this study is to examine the association between audit committee effectiveness
(ACE), internal audit function (IAF) and sustainability reporting practices.
Design/methodology/approach – Using a cross-sectional and correlational design, useable questionnaires
were received from 48 financial services firms in Uganda. The data were analyzed using Statistical Package for
Social Sciences.
Findings – results indicate that ACE and IAF are positively and significantly associated with sustainability
reporting practices. ACE and IAF are more significantly associated with economic and social indicators than
environmental sustainability indicators.
Research limitations/implications – In terms of practice, it is no longer a matter of having internal
auditors and audit committees in place but rather those who are mindful of the welfare of society and the
natural environment. The effectiveness of the board audit committee and a functioning internal audit can be
assessed in terms of their recommendations and decisions regarding improvements in the welfare of society
and the natural environment in addition to the traditionally known performance benchmarks.
Practical implications – The study focuses on only financial services firms in Uganda, and this is a small
sample. Future studies may focus on larger samples to enable comparison of the results.
Originality/value – This study provides insights on the initial understanding of the association between
ACE, IAF and sustainability reporting practices using evidence from a developing African country – Uganda.
Description
Keywords
Sustainability reporting practices, Audit committee effectiveness, Internal audit function, Legitimacy theory, Agency theory, Uganda
Citation
Tumwebaze, Z., Bananuka, J., Kaawaase, T. K., Bonareri, C. T., & Mutesasira, F. (2021). Audit committee effectiveness, internal audit function and sustainability reporting practices. Asian Journal of Accounting Research. DOI 10.1108/AJAR-03-2021-0036