Effects of Audit Quality on Financial Reporting Quality in Middle East and North Africa (Mena)

Abstract

This paper presents an analysis between audit quality and financial reporting quality (FRQ) within Middle East and North Africa (MENA) countries. Drawing on empirical findings and theoretical frameworks, the study examines how audit characteristics including auditor consortium arrangements, auditor-partner qualifications, audit committee effectiveness, and internal audit capabilities shape the credibility, timeliness, and transparency of corporate financial disclosures. However, the impact of such measures is contingent on the specific corporate and regulatory context of each region. For regulators, the idea is to supports the development of policies and guidelines aimed at promoting effective audit quality as a part of broader efforts to enhance corporate governance and transparency. Furthermore, to achieve these objectives, the study obtained data from listed firms on Amman Stock Exchange, Egypt Stock Exchange and Saudi Arabia Stock Exchange from 2020-2024 during which 128 firms were scrutinized, culminating in a total of 1280 observations. The results revealed that there is a significant positive relationship between audit effectiveness and financial reporting quality. The audit quality is also expected to enhance the audit on earnings accruals, the study presents useful insights to regulators, practitioners, and investors with new empirical evidence on audit quality from the perspective of non-financial companies. Finally, the study has implications for captains of industries to devise the most effective and efficient means of managing companies in the Middle East and North Africa (MENA). Thus, the study has implications for captains of industries to devise the most effective and efficient means of managing companies in the Middle East and North Africa (MENA). Finally, the study will add more value to the body of literature related to the variables under study.