Does Corporate Sustainability Shape Audit Opinion? The Moderating Role of Audit Committee Independence

Abstract

Audit opinion, as the most important output of the audit process, reflects the independent auditor’s professional judgment regarding the fair presentation of financial statements and plays a decisive role in stakeholders’ decision-making. In this regard, corporate sustainability performance, which reflects an entity’s attention to environmental, social, and governance dimensions, can be considered as a criterion for assessing the quality of financial reporting and risk management. On the other hand, audit committee independence, as one of the pillars of corporate governance, provides effective oversight of financial and auditing processes. This study aims to analyze the potential role of corporate sustainability performance and audit committee independence in shaping audit opinions. Therefore, the objective of this study is to determine the impact of corporate sustainability performance on audit opinion with regard to the role of audit committee independence in companies listed on the Tehran Stock Exchange. To achieve this objective, two hypotheses were developed. To test these hypotheses, using the systematic elimination method, a sample consisting of 150 companies listed on the Tehran Stock Exchange was selected during the period from 2019 to 2024. This study is applied in nature, and the research models were estimated using multiple regression analysis. The findings indicate that corporate sustainability performance has a negative and significant effect on qualified audit opinions. Furthermore, audit committee independence strengthens the effect of corporate sustainability performance on qualified audit opinions