An Investigation of Investor Trust in Audited Financial Reports and Its Impact on Investment Consideration in the Cambodia Securities Exchange (CSX)

Despite more than a decade of operation, investor participation and liquidity in the Cambodia Securities Exchange (CSX) remain limited. While existing discussions often emphasize structural constraints, financial literacy, or market size, comparatively little empirical attention has been given to trust in audited financial reports as a foundational condition for investor engagement. This study investigates trust in audited financial reports as a central construct in Cambodia’s capital market context, examining both how such trust is formed and whether it is perceived as a prerequisite for considering investment in CSX- listed companies.

Drawing on agency theory, signalling theory, institutional theory, and trust theory, the study examines the relationships between three audit-related elements—audit quality, auditor reputation, and regulatory oversight—and trust in audited financial reports. In addition, it assesses whether trust functions as a baseline requirement rather than a marginal influence on investment consideration. Using a quantitative research design, cross-sectional survey data were collected from 360 respondents with current or prior investment experience. Data were analysed using reliability analysis, descriptive statistics, multiple linear regression, and one-sample t-tests.

The findings indicate that audit quality, auditor reputation, and regulatory oversight are all positively and significantly associated with trust in audited financial reports. Furthermore, the results provide strong evidence that trust in audited financial reports is perceived as a prerequisite condition for considering participation in the CSX. Respondents consistently indicated that, regardless of potential returns, insufficient trust would discourage investment.

This study contributes to the auditing and finance literature by explicitly conceptualising trust in audited financial reports as a measurable and foundational construct. From a policy and practical perspective, the findings suggest that strengthening audit credibility and regulatory oversight should be prioritised as part of Cambodia’s capital market development strategy. Contents List of Tables ............................................................................................................................... V