Auditor Industry Specialization and Financial Information Quality: An Exploratory Analysis of Listed Companies in Morocco

Résumé

Abstract

The quality of financial information published by companies remains important in emerging contexts to ensure growth and confidence in financial markets. External audit constitutes an exogenous control mechanism for managers' opportunistic actions. Its quality depends on the perceived ability to discover errors or weaknesses in the accounting system and financial information. This ability can be enhanced through the accumulation of experience and expertise in a given industry sector and the in-depth understanding of associated issues, thereby enabling a relevant level of control. To this end, using 245 observations from listed companies in Morocco for the period 2019-2023, we explore the relationship between audit industry specialization and information quality in a context where few studies have analyzed how context affects audit practices. Our results are differentiated according to the type of actor (Big vs non-Big), which illustrates the contextual specificities of the audit market. Moreover, the results offer implications for audit firms that could be relevant for comparative and in-depth research.

Keywords: Financial Information Quality, Audit Industry Specialization, External Audit, Audit Quality, Emerging Market