The Role of Environmental Control as a Moderating Variable in the Relationship between Accounting Control and Sustainable Performance: An Empirical Study on Egyptian Industrial Companies

Document Type : Original Article

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Department of Accounting Faculty of Commerce - Damanhour University

Abstract

This study aims to analyze the moderating effect of environmental control in the relationship between accounting control and sustainable performance, applied to 53 industrial companies listed on the Egyptian Exchange (EGX) during the period 2021 to 2023. The sample was purposively selected based on the availability of a minimum level of accounting and environmental disclosure. With three years for each company, the total number of observations amounted to 138 firm-year observations.
The study relied on the development of two composite indices to measure both accounting control (CPA Index) and environmental control (EPA Index), while sustainable performance was assessed through three dimensions: financial, environmental, and social. Correlation analysis and multiple linear regression were used to test the relationships and targeted effects in support of the study’s hypotheses.
The results revealed a statistically significant positive impact of accounting control on sustainable performance. Furthermore, environmental control demonstrated an effective moderating role, as it enhanced the impact of accounting control in firms with high levels of environmental disclosure.
This study contributes to the development of an integrated control model that supports both environmental and accounting governance. It also offers practical recommendations for industrial companies and regulatory bodies to adopt disclosure and sustainability policies based on the interaction between control systems, thereby strengthening institutional trust and enhancing performance efficiency in emerging market environments.

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