Audit quality, ESG disclosure and firm performance: Evidence from nonfinancial listed companies in Vietnam

Abstract

This study examines how audit quality and ESG disclosure relate to the performance of nonfinancial companies listed on the Ho Chi Minh City and Hanoi stock exchanges between 2020 and 2024. Audit quality is captured by Big 4 auditor engagement, auditor change and the type of audit opinion, ESG disclosure is measured with S&P Global ESG scores, and performance is measured by return on assets, return on equity and Tobin's Q. Using pooled OLS, fixed effects and random effects panel regressions, with firm size, age, leverage and the equity to assets ratio as controls, the study finds that results differ across performance measures. Where the Hausman test favours fixed effects, an unqualified audit opinion is positively and significantly associated with both return on equity and Tobin's Q, while leverage is negatively related to return on equity and positively related to Tobin's Q. Neither audit quality nor ESG disclosure is significantly related to return on assets. The positive associations of Big 4 auditors and ESG disclosure with firm value appear only in pooled or random effects estimates and do not persist in the fixed effects models. Auditor change shows no consistent relationship with performance. The findings suggest that audit related signals, rather than ESG scores or auditor size, are most closely linked to shareholder returns and market valuation in Vietnam, although the results are associations and may be affected by endogeneity and measurement limits. The study offers implications for audit oversight and ESG reporting standards in emerging markets.