Audit Quality as an Adjunct Digital Governance Mechanism: An Evidence from Dividend Policy in Jordan

  • Received July 03, 2025; Accepted December 24, 2025; Published December 31, 2025
  • Author(s): Khaled Mohammad Nour Alsmadi, Supiah Binti Salleh, Nur Hidayah Binti Laili
  • http://doi.org/10.70568/IJDAFS.25.2.1.1.2

Abstract:

Audit Quality as an Additional Governance Mechanism in the Context of Corporate Dividend Policy: Empirical Evidence from Listed Jordanian Industrial Companies. Based on agency theory, this study examines whether audit quality enhances corporate governance by influencing the formulation, distribution ratio, and stability of dividend policy. Using panel data from 2010 to 2020, the analysis employs hierarchical regression to examine the direct effects of corporate governance, as well as the boundary conditions for these direct effects (i.e., the moderating roles of audit quality, measured by affiliation with one of the Big Four audit firms, audit report dates, and audit report types). This evidence suggests that board and company size have a positive influence on dividend decisions, whereas ownership concentration is not statistically significant. However, audit quality does have a significant moderating effect. In particular, there is a strong positive correlation between the Big Four audit firms and all dividend indicators in ownership concentration, suggesting that high-quality audits enhance oversight by major shareholders. Furthermore, audit quality positively affects dividend stability, indicating that reliable external audits contribute to more stable, sustainable dividend patterns. Audit quality complements, rather than replaces, internal controls. These findings have significant implications for regulators, investors, and corporate boards in developing economies, highlighting the importance of audit quality for good governance by fostering confidence in the credibility and sustainability of dividend distributions.