The Role of Statutory Auditors in Implementing Corporate Governance Standards: Legal Evidence from Public Joint Stock Companies with a Focus on the United Arab Emirates and Jordanian Financial Sectors

Abstract

This study explores the pivotal role of statutory auditors in the implementation and enforcement of corporate governance standards within public joint stock companies in the United Arab Emirates and Jordan. This study employs a quantitative to assess the role of statutory auditors in corporate governance across the UAE and Jordan. The quantitative phase involved 220 professionals from the financial sector, ensuring balanced representation from both countries. The results show that all four direct hypotheses are statistically significant, as all p-values are below the standard threshold of 0.05. The strongest relationship is between Corporate Governance and Transparency and Disclosure Practices (β = 0.903, T = 110.218, p = 0.000), indicating a nearly perfect and highly stable effect. This confirms that enhanced governance practices strongly drive transparency in corporate reporting. Also, the mediation analysis reveals a statistically significant indirect effect of Statutory Auditors on Transparency through Corporate Governance, with a path coefficient of 0.481 and a T-statistic of 10.893 (p = 0.000). This implies that Corporate Governance fully mediates the relationship between auditors and transparency, and that the indirect pathway is equally strong as the direct one. This result highlights a critical insight: while statutory auditors can influence transparency directly (e.g., through audit reporting), their impact is significantly enhanced when embedded within a strong governance framework. The findings of this study hold substantial importance for the financial sectors in both the UAE and Jordan, where public confidence, regulatory compliance, and market stability are directly tied to the integrity of corporate governance.