The impact of financial reporting quality and audit quality on investment efficiency: Empirical evidence in Vietnam

Abstract

The economic growth of a country is closely tied to the development of domestic enterprises. To meet development objectives, companies must effectively invest by integrating various sources of capital. Consequently, investment efficiency is a crucial determinant of growth, impacting not only individual enterprises but also the broader economy.. As a result, the factors influencing investment efficiency are given considerable attention, particularly research on the impact of financial reporting information quality, audit quality, and investment efficiency, garnering attention from both managerial circles and academic researchers. However, there remains to be more consensus in research findings on this area. Therefore, this research examines the impact of financial reporting information quality and audit quality on investment efficiency. Quantitative analysis through REM, FEM and PCSE techniques with a sample of 673 non-financial enterprises listed on the Vietnamese stock market from 2015 to 2022. The results of the article show that the quality of financial reporting information and audit quality positively influence investment efficiency. Research implications give stakeholders such as businesses, authorities, and managers an effective mechanism to maximize profits through effective investment decisions.