Timeliness of Annual Audit Report: Some Empirical Evidence from Malaysia

SSRN Electronic Journal 12/2011; DOI: 10.2139/ssrn.1967284


The aim of this study is to examine the factors that influence annual audit report in Malaysia. The sample includes 300 largest companies listed in the KLSE for the year ended 2009. Findings show that audit report lag is significantly influenced by auditor type, audit opinion and firm performance. However, no evidence was found to support the effect of board independence, audit committee size, audit committee meetings and audit committee qualifications on audit report lag. Apart from contributing to the literature on determinants of audit timeliness, this study also falls under the strand of literature that examines the consequences of the regulatory changes introduced around the world to strengthen corporate governance and financial reporting transparency, hence provide evidences of recent audit delays.

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    • "delays (e.g., Afify, 2009; Shukeria & Nelson, 2011). It can, therefore, be stated that effective corporate governance can enhance internal controls, confine business risks and bring about shorter audit delay and improve timeliness of financial reports. "
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    ABSTRACT: This study explores the influence of board independence, board size, CEO duality, board diligence, board financial expertise and presence of audit committee as well as the type of sector on the timeliness of financial reports among selected Jordanian companies. The timeliness of the financial reports is measured by audit report lag (ARL) and management report lag (MRL). This study covers 112 firms listed on the Amman Stock Exchange for the years 2011 and 2012. The results of the ARL model indicate that companies that have members of board who are independent from management take a significantly shorter time to prepare and issue their financial reports. The results indicate that companies with greater number of board of directors are related with a higher audit report lag. The results also show that companies that separated the CEO and chairman's roles are quicker in publishing financial reports than companies combining the roles of CEO and chairman. In addition, boards of directors with more meetings make the audit report lag shorter. The findings also support that argument that the existence of an audit committee could resolve the information asymmetry between management and external auditors that, in turn, would lead to reduced audit report lag and management report lag. However, the results of the MRL model show that management report lag is related positively to large board size and board diligence and negatively to the existence of audit committee. This study concludes that the good structures of corporate governance play a key role in improving the quality of timeliness of financial reports. © 2015 Mediterranean Journal of Social Sciences. All rights received.
    Full-text · Article · Jan 2015 · Mediterranean Journal of Social Sciences
    • "Second, this literature used a different research method, for example, variables definitions and measurements, and this difference significantly contributes to the mixed results of corporate governance studies (Cohen et al., 2008; Pomeroy & Thornton, 2008). For example, Abullah (2007), and Shukeri & Nelson (2011) used the proportion of non-executive directors who may be independent or affiliated to measure the effect of board independence. Other analysis only used the proportion of independent non-executive directors to measure the independence (e.g. "
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    ABSTRACT: This study reviews timeliness and audit committee expertise literature. The timeliness of financial reporting is an important qualitative characteristic of information that contributes to the usefulness of information. Management, board of directors, shareholders, investors and policy makers need timely information to make effective and efficient decisions. Consequently, prior research argues that corporate governance mechanisms should promote the timeliness of accounting information. It is noted that audit committee is the first mechanism in the corporate governance mosaic that is responsible to oversee and ensure the quality of the financial reporting process. Therefore, this mechanism should have the relevant expertise to discharge its responsibility in an effective manner. However, a review of recent literature on timeliness that incorporated corporate governance mechanisms, particularly audit committee characteristics, provide inconclusive results. Further, this literature focuses on the influence of audit committee financial expertise and the results yield inconsistent findings suggesting that audit committee financial expertise needs further power (expertise) to effectively exert the role of the committee. Furthermore, the recent audit committee literature reports a significant influence of audit committee industry expertise on the effectiveness of the audit committee. In addition, it suggests a need to investigate the role of the audit committee chairman in enhancing the effectiveness of the audit committee.
    No preview · Conference Paper · Nov 2012