International Accounting Standards

This study investigates the role of auditor quality in annual report disclosure. It is hypothesized that the extent and quality of annual report disclosure is related to the quality of the auditor, proxied by size. Due to risk to their reputation capital, in uncertain situations, auditors of higher quality will encourage greater and higher quality disclosures. The study is based on a cross-section of 150 Australian listed firms and uses the uncertainty surrounding the adoption of the International Financial Reporting Standards as an opportunity to examine this issue. The study provides evidence that companies audited by higher quality auditors have greater disclosure in terms of both extent and quality