Impact of auditor independence, expertise, and industry experience on financial reporting quality

Abstract

This study examines the impact of auditor independence, auditor expertise, and auditor industry experience on financial reporting quality. A quantitative method was employed and a survey was sent to a sample of 203 auditors. The findings revealed a significant positive relationship between auditor independence and financial reporting quality. This suggests that when auditors maintain independence and objectivity in their engagements, the accuracy and reliability of financial reporting are enhanced. Furthermore, the findings revealed that the expertise of auditors plays a vital role in ensuring compliance with accounting standards and ethical principles, thereby improving the quality of financial reporting. Additionally, the findings showed that auditors with industry-specific knowledge and expertise are better equipped to understand the unique challenges and opportunities within different sectors, leading to better financial reporting quality. This study is significant, as it contributes to the auditing literature by providing insights into the context of Lebanon, a nation grappling with economic and governance challenges, and underscores the pivotal role of auditors in upholding financial integrity in such turbulent environments.