**Appendix 1: Sample companies**

The above scores improve slightly over the 3-year period (2014–2016): sustainability reporting positively and significantly affected the income smoothing practice made by Saudi-listed companies at the 5% level. Furthermore, the effect of firm size on the income smoothing practice is significantly positive at a level of 10%. Concerning the role of the sector sensitivity, I

**Relation between income smoothing SMTH and sustainability reporting (SR score) Coeff. Std err. t P > |t| [95% conf. interval]**

SR 0.056 0.042 2.773 0.041\*\* 0.027 0.069 SIZE 0.007 0.002 2.053 0.091\*\*\* 0.061 0.163 SECT 0.108 0.099 2.097 0.001\* 0.083 0.112

Sustainable development is a complex concept that opens the door to many interpretations and topics on the usefulness and credibility of accountability of sustainable development.

The study tried to explain the link between earnings quality (attributes) presented by income smoothing and the sustainability communication made by Saudi-listed companies. Empirical

results show a significant effect of sustainability reporting on income smoothing.

also note a significantly positive effect on income smoothing at the 1% level.

**Test Statistic df p > Chi2** White test 32.66 18 0.000

**Variables VIF Tolerance** SMTH 1.77 0.56 SR 1.44 0.69 SIZE 1.09 0.91 SECT 1 1

**4. Discussion and conclusion**

**Table 4.** Hypothesis test—linear regression.

**Heteroskedasticity test for the model**

24 Sustainability Assessment and Reporting

**Table 2.** Heteroskedasticity test.

**Table 3.** Multicollinearity test.

**Dependent variable**

\*Significance at 1%. \*\*Significance at 5%. \*\*\*Significance at 10%.

**(SMTH)**

**Multicollinearity test (variance inflation factor) for model**


**Company Sector**

Anaam International Holding Group Agriculture and food industries Ash-Sharqiyah Development Co. Agriculture and food industries Bishah Agricultural Development Co. Agriculture and food industries Halwani Bros. Co. Agriculture and food industries Herfy Food Services Co. Agriculture and food industries Jazan Development Co. Agriculture and food industries National Agricultural Development Co. Agriculture and food industries Qassim Agricultural Co. Agriculture and food industries Saudi Airlines Catering Co. Agriculture and food industries Saudi Fisheries Co. Agriculture and food industries Saudia Dairy and Foodstuff Co. Agriculture and food industries Savola Group Agriculture and food industries Tabuk Agricultural Development Co. Agriculture and food industries Wafrah for Industry and Development Co. Agriculture and food industries

Sustainability Reporting and Income Smoothing: Evidence from Saudi-Listed Companies

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Al Abdullatif Industrial Investment Co. Industrial investment Al Hassan Ghazi Ibrahim Shaker Co. Industrial investment Al Sorayai Trading and Industrial Group Industrial investment Astra Industrial Group Industrial investment Basic Chemical Industries Co. Industrial investment Filing and Packing Materials Manufacturing Co. Industrial investment Middle East Paper Co. Industrial investment National Metal Manufacturing and Casting Co. Industrial investment Saudi Arabian Mining Co. Industrial investment Saudi Chemical Co. Industrial investment Saudi Industrial Export Co. Industrial investment Saudi Paper Manufacturing Co. Industrial investment Saudi Pharmaceutical Industries .. Industrial investment Takween Advanced Industries Co. Industrial investment The National Company for Glass Industries Industrial investment Abdullah A. M. Al-Khodari Sons Co. Building and construction Al-Babtain Power and Telecommunication Co. Building and construction Arabian Pipes Co. Building and construction Bawan Co. Building and construction


**Company Sector**

26 Sustainability Assessment and Reporting

Al Jouf Cement Co. Cement Arabian Cement Co. Cement City Cement Co. Cement Eastern Province Cement Co. Cement Hail Cement Co. Cement Najran Cement Co. Cement Northern Region Cement Co. Cement Qassim Cement Co. Cement Saudi Cement Co. Cement Southern Province Cement Co. Cement Tabuk Cement Co. Cement Umm Al-Qura Cement Co. Cement Yamama Cement Co. Cement Yanbu Cement Co. Cement Abdullah Al Othaim Markets Co. Retail Al Hammadi Company for Development and Investment Retail Aldrees Petroleum and Transport Services Co. Retail Alkhaleej Training and Education Co. Retail Dallah Healthcare Holding Co. Retail Fawaz Abdulaziz Alhokair Co. Retail Fitaihi Holding Group Retail Jarir Marketing Co. Retail Mouwasat Medical Services Co. Retail National Agricultural Marketing Co. Retail National Medical Care Co. Retail Saudi Automotive Services Co. Retail Saudi Company for Hardware Retail Saudi Marketing Co. Retail United Electronics Co. Retail

Yanbu National Petrochemical Co. Petrochemical industries

National Gas and Industrialization Co. Energy and utilities Saudi Electricity Co. Energy and utilities

Al-Jouf Agricultural Development Co. Agriculture and food industries Almarai Co. Agriculture and food industries


**Dimensions Terms**

Land remediation and contamination

Pollution abatement • Emission of pollutants

Sustainable development • Natural resource conservation

• Discharges

• Waste management

• Noise and odors

• Life cycle information

• Efforts of remediation

• Implicit liability

• Awards

• ISO 14000

Labor practices and decent work • Absenteeism and reasons

• Potential liability remediation

Environmental management • Environmental policies or company concern for the Environment

• Environmental auditing • Goals and targets

• Employment opportunities • Labor rights/job creation

• Equity programs

• Accidents at work

• Employee savings

• Health and safety programs

• Environmental management system

• Spills (number, nature, efforts of reduction)

• Department, group, service affected to the environment

• Involvement in environmental organizations

• Rehiring, accompanying, social communication

• Human capital development/training

• Involvement of the firm in the development of environmental standards

Sustainability Reporting and Income Smoothing: Evidence from Saudi-Listed Companies

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• Joint projects with other firms providing environmental management services

• Recycling

• Sites

• Installation and process controls • Compliance status of facilities
