Measurement of variables
| Variable | Acronym | Variable description |
|---|---|---|
| Dependent variable | ||
| Sustainability reporting practices | SRP | Measured based on the GRI standards 2016 on environmental, social and economic indicators |
| Predictor variable | ||
| Audit committee effectiveness | ACE | Measured by average score of questions on a six-point Likert scale on review of financial and nonfinancial information and liaison with external auditors |
| Internal audit function | IAF | Measured by average score of questions on a six-point Likert scale on review and evaluation of internal control systems and risk management |
| Control variables | ||
| Firm age | AGE | A dummy variable coded as 0 if the firm has been in operation for at least five years, 1 if the firm has been in operation for above five years but not more than 10 years, 2 if the firm has been in operation for more than 10 years but not more than 15 years and 3 if the firm has been in operation for more than 15 years |
| Firm size | SIZE | A dummy variable coded as 0 if the firm employs 50 and below employees and, 1 if the firm employs more than 50 employees |
| Auditor type | AUD | A dummy variable coded as 0 if the firm is audited by the big 4 audit firms [such as PwC, Ernst and Young, KPMG, Delloite and Touche], 1 if the firm is audited by the small and medium audit practices [such as Sejjaaka Kaawaase and company certified public accountants] and 2 if the firm is always audited by both the big 4 audit firms and the small and medium audit practices |
| β0 | Constant | |
| Εj | Error term | |
| Variable | Acronym | Variable description |
|---|---|---|
| Sustainability reporting practices | SRP | Measured based on the GRI standards 2016 on environmental, social and economic indicators |
| Audit committee effectiveness | ACE | Measured by average score of questions on a six-point Likert scale on review of financial and nonfinancial information and liaison with external auditors |
| Internal audit function | IAF | Measured by average score of questions on a six-point Likert scale on review and evaluation of internal control systems and risk management |
| Firm age | AGE | A dummy variable coded as 0 if the firm has been in operation for at least five years, 1 if the firm has been in operation for above five years but not more than 10 years, 2 if the firm has been in operation for more than 10 years but not more than 15 years and 3 if the firm has been in operation for more than 15 years |
| Firm size | SIZE | A dummy variable coded as 0 if the firm employs 50 and below employees and, 1 if the firm employs more than 50 employees |
| Auditor type | AUD | A dummy variable coded as 0 if the firm is audited by the big 4 audit firms [such as PwC, Ernst and Young, KPMG, Delloite and Touche], 1 if the firm is audited by the small and medium audit practices [such as Sejjaaka Kaawaase and company certified public accountants] and 2 if the firm is always audited by both the big 4 audit firms and the small and medium audit practices |
| Constant | ||
| Error term | ||
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