Abstract:
This study aimed to investigate the effects of corporate governance on audit
quality. Using a sample of 100 Sri Lankan listed companies from 2016 to
2020, this study used the ordinary least squares method. The results of this
study overall suggests that there is a significant relationship between board
size, board independence, audit committee independence and audit quality
proxies. However, CEO duality and audit committee financial literacy are
only significantly associated with BIG4. This study demonstrates the need
of taking the institutional context into account in governance studies. This
research focused on companies in Sri Lanka. Future studies should look
into this issue in other contexts and time periods. This study is significant
for practitioners and academics, legislators, and professional accounting
organisations because it demonstrates how legislative reforms might
encourage corporations in emerging markets to adopt good governance
practices. The findings are also valuable for investors in examining the
impact of corporate governance on audit quality. The study adds to the
body of knowledge by demonstrating that there is a substantial association
between corporate governance and audit quality in Sri Lankan listed
companies.
