Examining the Moderating Role of the Quality of Financial Audits and Sustainability Assurance on the Relationship between Environmental, Social, and Governance Factors and the Payment and Growth of Company Dividends: Evidence from Iran
Subject Areas : • Using of new tools in accounting and auditing educationAnahita Zandi 1 , Fereydoon Rahnama Roodposhti 2
1 - PhD in Accounting, Lecturer of Accounting Department, Faculty of Management, North Tehran Branch, Islamic Azad University, Tehran, Iran
2 - Professor, Department of Accounting, Science and Research Branch, Islamic Azad University,Tehran,Iran
Keywords: Audit quality, Dividend payment, Dividend growth, Environmental, social, Governance factors.,
Abstract :
Objectives: This research examines the relationship between environmental, social, and governance scores and dividend distribution decisions of companies, taking into account the moderating role of financial audit quality to ensure sustainability.
Design/methodology/approach: This research is applied, with a causal correlation methodology.
Despite limitations, a sample of 152 firms was selected for the years 2018-2022. Multivariate linear regression based on panel data was used to test the research hypotheses.
Results: Panel regression analyses reveal a positive and significant correlation between ESG scores and dividend payouts. This suggests that companies with strong environmental, social, and governance practices prioritize stakeholders and shareholders, maintaining dividend payments. However, companies that prioritize high-quality ESG practices experience slower dividend growth. Additionally, audit quality negatively moderates the relationship between ESG scores and dividend payouts, particularly for companies audited by A-rated firms. Quality assurance of ESG factors did not yield statistically significant results.
Innovation: The findings have implications for investors, management, analysts, and policymakers, offering valuable insights for companies looking to enhance their sustainability practices.
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