In today's business world, companies are more and more responsible for how their actions affect society and the environment. Investors, customers, employees, and regulators want companies to show they're not just making money but also behaving ethically and sustainably. Consequently, the relationship between financial reporting quality, CG mechanisms, corporate social responsibility, tax avoidance, and firm value has garnered significant attention and research. By following the FRQ and CG mechanisms, companies can effectively identify prospects for socially responsible investments and ethical tax avoidance, thereby contributing to the enhancement of firm value. The research aims to examine the link between financial reporting quality and corporate governance mechanisms (independent variables) on corporate social responsibility, tax avoidance, and firm value (dependent variables), for 45 non-financial companies listed on the Egyptian Stock Exchange Market (EGX 100) from 2016 to 2022.
The results indicate that the FRQ and CG mechanisms are key elements of effective CG strategies. High-quality financial reporting and effective CG can positively influence CSR practices, strengthen stakeholder trust, and enhance a company's reputation. Additionally, financial reporting quality and CG can have implications for tax avoidance, either by deterring aggressive tax planning or promoting ethical behavior. The increased trust and transparency that results from adhering to these standards can lead to higher firm value and increased investor confidence. In addition, these factors can contribute to a company's firm value and long-term sustainability in an increasingly socially conscious business environment.