The Impact of Adopting the Sustainability Balanced Scorecard (SBSC) by Audit Clients on the External Auditor’s Assessment of Internal Control Risk: An Empirical Study.

Ziad Roustom; Khalil  Isper Hamwi; Ahmad  M. Saeed Armoush; Samer  Msallam Shawqal

doi:10.48161/qaj.v5n3a1788

Authors

Ziad Mohammad Roustom Department of Financial Management, Academic Programs for Military Colleges, Abu Dhabi University, Abu Dhabi 59911, UAE;
Khalil Isper Hamwi Department of Accounting, Business Administration College, Al Rasheed International Private University For Science & Technology, Dar`a 61111, Syria;
Ahmad M. Saeed Armoush Department of Accounting, Business Administration College, Al Rasheed International Private University For Science & Technology, Dar`a 61111, Syria;
Samer Msallam Shawqal Department of Accounting, Faculty of economics, Damascus University, Damascus 72039, Syria.

DOI:

https://doi.org/10.48161/qaj.v5n3a1788

Keywords:

Sustainability Balanced Scorecard, SBSC, – Control Risk

Abstract

This study aimed to examine the impact of audit clients’ adoption of the Sustainability Balanced Scorecard (SBSC) on the external auditor’s assessment of internal control risk. To achieve the objectives of this study and test its hypotheses, the researchers reviewed 50 audit engagements conducted by two auditing firms operating in the Middle East (UAE, KSA, Jordan, Lebanon, Syria). The data necessary to measure the dependent variable - control risk for these engagements - was obtained using specific matrices. Additionally, the independent variable (SBSC) was measured using a model developed by the researchers, which incorporates the five dimensions of the SBSC. Subsequently, the data were analyzed, and the study's hypotheses were tested using regression analysis through the SPSS software. The statistical tests revealed that clients’ adoption and use of the SBSC in measuring their strategic performance led to a reduced auditor assessment of control risk associated with the client. This, in turn, has favorable implications for the audit process overall.

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