The Relationship between Readability of Credit Risk Disclosure and the Level of Credit Risk under the Moderate Role of Audit Quality: An applied study on Saudi banks

This research aims to study the relationship between readability of credit risk disclosure and the level of these risks. The research also seeks to study the impact of the audit quality as a moderating variable on this relationship, through a sample of Saudi banks listed on the Saudi Stock Exchange (Tadawul) during the period from 2018 to 2022.
The results of the study showed a negative and significant relationship between readability of credit risk disclosure and the level of credit risk, which supports the validity of the first hypothesis of the study, which assumes that there is a significant relationship between the readability of credit risk disclosure and the level of credit risk. The results also showed that there is a negative and significant relationship between the level of credit risk and return on assets, where the lower return on assets, the higher the level of credit risk. The results also show that there is a positive and significant relationship between the level of credit risk and financial leverage.
The study also found that audit quality has an impact on the relationship between readability of credit risk disclosure and the level of credit risk, indicating that as the quality of the audit process increases, the readability of credit risk disclosure increases. This supports the validity of the second hypothesis of the study, which assumes that audit quality affects the relationship between the readability of credit risk disclosure and the level of credit risk.