Corporate Accountability and Sustainable Finance: Insights from Audit Quality and Whistleblowing Literature

Abstract

This study conducts a literature review to examine the influence of audit quality and whistleblowing systems on sustainable finance practices. Based on peer-reviewed articles published over the last decade, this review synthesizes both conceptual and empirical evidence to explore how these governance mechanisms strengthen financial transparency, accountability, and ethical behavior. The findings indicate that high audit quality enhances the credibility of financial reporting and sustainability, thereby reducing information asymmetry and increasing investor trust. Meanwhile, whistleblowing systems serve as effective internal control mechanisms to detect fraud and unethical practices at an early stage, thus promoting stronger corporate governance. The interaction of these mechanisms demonstrates a complementary role: external audits provide assurance on disclosed information, while whistleblowing systems reinforce internal monitoring and ethical culture. This synergy is considered vital in advancing sustainable finance, particularly in emerging markets where governance challenges remain significant. Furthermore, the review identifies moderating factors such as firm size, industry characteristics, and regulatory frameworks that shape the effectiveness of these mechanisms. This study contributes to the literature on corporate governance and sustainable finance by emphasizing the joint role of audit quality and whistleblowing disclosure in fostering accountability, legitimacy, and alignment with the United Nations Sustainable Development Goals (SDGs). Practical implications are also highlighted for regulators and practitioners to strengthen audit independence, enhance whistleblower protections, and design robust oversight mechanisms that support sustainable financial systems.