Green accounting practices, financial health, the audit and its impact on the value of the company

Abstract

To provide empirical evidence on financial and non-financial factors affecting corporate governance and financial sustainability, this study examines the impact of return on assets, financial distress, firm size, corporate social responsibility (CSR), and audit opinion on firm value. The SEM-PLS method employs discriminant validity, multicollinearity tests, and the Heterotropy-Monotropy (HTMT) ratio to ensure model robustness. The results show that return on assets, financial distress, and CSR have a positive impact on firm value, highlighting the importance of financial stability and responsible business practices. However, firm size does not have a significant linear impact, indicating that growth dynamics are more complex than size alone. Audit opinion moderates the influence of financial ratios on firm value, in line with previous studies emphasizing financial health and sustainability as key success factors. Although this study provides novel insights and practical guidance for financial executives, its industry and geographic limitations limit generalizability. Future research should expand the dataset to include different industries and geographies for broader applicability. This study contributes to the accounting and finance literature by integrating CSR and audit perspectives into firm valuation analysis. The use of SEM-PLS ensures methodological rigor and provides new insights into how financial and non-financial factors interact to shape firm value. Findings have practical implications for managers, auditors, and policymakers seeking to improve financial performance and sustainability.