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Sustainable accounting quality and its impact on financial success aligned with SDGs

Poornima Mishra (Department of Strategy and Leadership, Tecnologico de Monterrey, EGADE Business School, Mexico, Mexico)
Ashish Sharma (Department of Accounting and Finance, Indian Institute of Management Bodh Gaya, Bihar, India)
Mustafa Raza Rabbani (College of Business Administration, University of Khorfakkan, Khorfakkan, United Arab Emirates)
Asif Khan (Department of Finance and Accounting, Institute of Management Technology Nagpur, Nagpur, India)
Sunil Kumar (Department of Finance, Indian Institute of Forest Management, Bhopal, India)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 1 May 2024




Financial and nonfinancial disclosures (sustainable accounting) are crucial in the annual financial reports of many firms. This study aims to explore the dynamic relationship between sustainability disclosure quality (SDQ) and financial performance (FP) within mandatory disclosure frameworks. SDQ is evaluated across six dimensions, encompassing both the quality and quantity of disclosures, aiming to understand their reciprocal influence.


Using the generalized method of moments (GMM), this research analyzes data from 2013 to 2019, focusing on 99 listed Indian firms within the S&P Bombay stock exchange (BSE) 500 index. The study uses rigorous measurement criteria to assess SDQ and uses statistical methods to unveil the causal link between SDQ and FP.


The results show a positive causal connection between SDQ and FP, where organizations with good FP make relatively higher disclosures across FP proxies than their counterparts. Additionally, the study investigates the impact of research and development (R&D) expenditure and dividend payments (DIVD) on SDQ. Notably, lower R&D spending is associated with higher quality SDs, and companies with superior SDQ exhibit increased DIVD.

Practical implications

The findings advocate for strengthened regulatory compliance, incentivized sustainable practices and heightened reporting standards for a transparent business environment and achieving the relevant United Nations Sustainable Development Goals.


This research contributes original insights by uncovering the intricate relationship between SDQ and FP, shedding light on the impact of R&D expenditure and DIVD on SDQ. These findings contribute to a nuanced understanding of the interplay between FP and sustainability reporting within the context of mandatory disclosure frameworks.



Conflict of interest: The authors declare that there is no conflict among the authors and there is no financial or nonfinancial stake is there among themselves or outside.


Mishra, P., Sharma, A., Rabbani, M.R., Khan, A. and Kumar, S. (2024), "Sustainable accounting quality and its impact on financial success aligned with SDGs", Journal of Accounting & Organizational Change, Vol. ahead-of-print No. ahead-of-print.



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