Table 1 Description of the variables... | Emerald Publishing

Table 1

Description of the variables

Variables	Measurement
Internal auditing quality
IAQ	A composite score composed of the following variables: 1. Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) has obtained a Master in Business Administration (MBA) and/or a PhD, 0 (zero) otherwise 2. Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) possesses a number of years of internal auditing professional experience higher than the median of our sample, 0 (zero) otherwise 3 Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) has certifications and/or qualifications in internal auditing areas, 0 (zero) otherwise
	4. Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) reports directly to the board of directors or the audit committee, 0 (zero) otherwise
Family involvement in governance
FAM_OW	Percentage of family-held shares
FIB	Percentage of family members on the board of directors
F_LEAD	Dummy variable equal to 1 (one) if the CEO is from the owning family, 0 (zero) otherwise
F_GEN	The number of family generations that are on the board of directors
Firm-specific characteristics
LEV	Long-term debt to total assets
PROFIT	Net income to total assets
SIZE	Natural logarithm of total assets
GROWTH	Annual variation of sales divided by total assets
GEO_LOC	Ordinal variable that takes the value of 1 (one) if the firm headquarters is in northern Italy; the value of 2 (two) if the firm headquarters is in central Italy; the value of 3 (three) if the firm headquarters is in southern Italy
B_SIZE	Total number of directors on the board of directors
CEO_DUALITY	Dummy variable equal to 1 (one) when the Chief Executive Officer (CEO) is also the Chair of the Board, 0 (zero) otherwise
N_IND	Number of independent directors on the board of directors
SUST_COM	Dummy variable that takes the value of 1 (one) if the firm has established the board sustainability sub-committee, 0 (zero) otherwise

Variables	Measurement
Internal auditing quality
IAQ	A composite score composed of the following variables:1. Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) has obtained a Master in Business Administration (MBA) and/or a PhD, 0 (zero) otherwise2. Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) possesses a number of years of internal auditing professional experience higher than the median of our sample, 0 (zero) otherwise3 Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) has certifications and/or qualifications in internal auditing areas, 0 (zero) otherwise
	4. Dummy variable equal to 1 (one) if the Chief Audit Executive (CAE) reports directly to the board of directors or the audit committee, 0 (zero) otherwise
Family involvement in governance
FAM_OW	Percentage of family-held shares
FIB	Percentage of family members on the board of directors
F_LEAD	Dummy variable equal to 1 (one) if the CEO is from the owning family, 0 (zero) otherwise
F_GEN	The number of family generations that are on the board of directors
Firm-specific characteristics
LEV	Long-term debt to total assets
PROFIT	Net income to total assets
SIZE	Natural logarithm of total assets
GROWTH	Annual variation of sales divided by total assets
GEO_LOC	Ordinal variable that takes the value of 1 (one) if the firm headquarters is in northern Italy; the value of 2 (two) if the firm headquarters is in central Italy; the value of 3 (three) if the firm headquarters is in southern Italy
B_SIZE	Total number of directors on the board of directors
CEO_DUALITY	Dummy variable equal to 1 (one) when the Chief Executive Officer (CEO) is also the Chair of the Board, 0 (zero) otherwise
N_IND	Number of independent directors on the board of directors
SUST_COM	Dummy variable that takes the value of 1 (one) if the firm has established the board sustainability sub-committee, 0 (zero) otherwise

Source: Authors’ own creation