The Role of Corporate Governance Mechanism on Audit Report Lag During Economic Recession Period
DOI:
https://doi.org/10.22219/jrak.v15i2.34503Keywords:
Audit Committee, Audit Committee Expertise, Audit Report Lag, Corporate GovernanceAbstract
Purpose: This research aims to analyze the effect of internal corporate governance mechanism on audit report lag.
Methodology/approach: We observe 99 firms-years observations, or 33 companies listed in the LQ-45 Index during 2020 to 2022. Corporate governance mechanism measured by the existence of audit committee, measured by its independence, expertise, and audit committee performance. Audit report lag measured by the time of audit report delay from the normal due date. The research technique use panel data regression analysis.
Findings: The research findings show that the audit committee independence negatively influence the audit report lag. It means that the level of independence of audit committee reflect professionalism and competence, hence the audit committee provide their best effort as supervision function. The process of audit reporting also meets the scheduled in a timely manner. On the other hand, the number of audit meeting and financial expertise have no influence on the audit report lag.
Practical implications: Our findings provide empirical evidence on how to deal with the audit reporting process and how to avoid the audit report delay.
Originality/value: This research provide originality especially on the measurement of internal corporate governance mechanism by using audit committee performance. A new approach on board expertise in financial also consider as our value.
Downloads
References
Abdillah, M. R., Mardijuwono, A. W., & Habiburrochman, H. (2019). The effect of company characteristics and auditor characteristics to audit report lag. Asian Journal of Accounting Research, 4(1), 129–144. https://doi.org/10.1108/AJAR-05-2019-0042
Abernathy, J. L., Beyer, B., Masli, A., & Stefaniak, C. (2014a). The association between characteristics of audit committee accounting experts, audit committee chairs, and financial reporting timeliness. Advances in Accounting, 30(2), 283–297. https://doi.org/10.1016/j.adiac.2014.09.001
Abernathy, J. L., Beyer, B., Masli, A., & Stefaniak, C. (2014b). The association between characteristics of audit committee accounting experts, audit committee chairs, and financial reporting timeliness. Advances in Accounting, 30(2), 283–297. https://doi.org/10.1016/j.adiac.2014.09.001
Al Daoud, K. A., Ku Ismail, K. N. I., & Lode, N. A. (2015). The impact of internal corporate governance on the timeliness of financial reports of jordanian firms: Evidence using audit and management report lags. Mediterranean Journal of Social Sciences, 6(1), 430–442. https://doi.org/10.5901/mjss.2015.v6n1p430
Arifin, J. (2022). Determinants of the effectiveness of audit procedures in revealing fraud: An attribution theory approach. International Journal of Research in Business and Social Science (2147-4478), 11(6), 378–387.
Baatwah, S. R., Salleh, Z., & Stewart, J. (2019). Audit committee chair accounting expertise and audit report timeliness: The moderating effect of chair characteristics. Asian Review of Accounting, 27(2), 273–306. https://doi.org/10.1108/ARA-12-2017-0190
Basuony, M. A. K., Mohamed, E. K. A., Hussain, M. M., & Marie, O. K. (2016). Board characteristics, ownership structure and audit report lag in the Middle East. International Journal of Corporate Governance, 7(2), 180. https://doi.org/10.1504/IJCG.2016.078388
Bhuiyan, M. B. U., & D’Costa, M. (2020). Audit committee ownership and audit report lag: Evidence from Australia. International Journal of Accounting and Information Management, 28(1), 96–125. https://doi.org/10.1108/IJAIM-09-2018-0107
Dalwai, T., & Salehi, M. (2021). Business strategy, intellectual capital, firm performance, and bankruptcy risk: Evidence from Oman’s non-financial sector companies. Asian Review of Accounting.
Gede, W. A. A., & Ratna, S. M. M. (2021). The Effect of Good Corporate Governance on Audit Delay. Eurasia: Economics & Business, 1(43), 22–33.
Ghafran, C., & Yasmin, S. (2018a). Audit committee chair and financial reporting timeliness: A focus on financial, experiential and monitoring expertise. International Journal of Auditing, 22(1), 13–24. https://doi.org/10.1111/ijau.12101
Ghafran, C., & Yasmin, S. (2018b). Audit committee chair and financial reporting timeliness: A focus on financial, experiential and monitoring expertise. International Journal of Auditing, 22(1), 13–24. https://doi.org/10.1111/ijau.12101
Habib, A., Bhuiyan, M. B. U., Huang, H. J., & Miah, M. S. (2019). Determinants of audit report lag: A meta-analysis. International Journal of Auditing, 23(1), 20–44. https://doi.org/10.1111/ijau.12136
Habib, A., & Jiang, H. (2015). Corporate governance and financial reporting quality in China: A survey of recent evidence. Journal of International Accounting, Auditing and Taxation, 24(2015), 29–45. https://doi.org/10.1016/j.intaccaudtax.2014.12.002
Khlif, H., & Samaha, K. (2016). Audit committee activity and internal control quality in Egypt: Does external auditor’s size matter? Managerial Auditing Journal, 31(3), 269–289. https://doi.org/10.1108/MAJ-08-2014-1084
Lajmi, A., & Yab, M. (2022a). The impact of internal corporate governance mechanisms on audit report lag: Evidence from Tunisian listed companies. EuroMed Journal of Business, 17(4), 619–633. https://doi.org/10.1108/EMJB-05-2021-0070
Lajmi, A., & Yab, M. (2022b). The impact of internal corporate governance mechanisms on audit report lag: Evidence from Tunisian listed companies. EuroMed Journal of Business, 17(4), 619–633. https://doi.org/10.1108/EMJB-05-2021-0070
Lajmi, A., & Yab, M. (2022c). The impact of internal corporate governance mechanisms on audit report lag: Evidence from Tunisian listed companies. EuroMed Journal of Business, 17(4), 619–633. https://doi.org/10.1108/EMJB-05-2021-0070
Masciandaro, D. (2022). Independence, conservatism, and beyond: Monetary policy, central bank governance and central banker preferences (1981–2021). Journal of International Money and Finance, 122, 102579. https://doi.org/10.1016/j.jimonfin.2021.102579
Nazir, M. S., Younus, H., Kaleem, A., & Anwar, Z. (2014). Impact of political events on stock market returns: Empirical evidence from Pakistan. Journal of Economic and Administrative Sciences, 30(1), 60–78. https://doi.org/10.1108/jeas-03-2013-0011
Nipper, M. (2021). The role of audit committee chair tenure—A German perspective. International Journal of Auditing, 25(3), 716–732. https://doi.org/10.1111/ijau.12245
Nofiana, N., & Surifah, S. (2023). Audit Committee, Public Accountant Reputation, Ownership Structure, and Audit Report Lag. Proceedings of the International Conference on Economic, Management, Business and Accounting, ICEMBA 2022, 17 December 2022, Tanjungpinang, Riau Islands, Indonesia. Proceedings of the International Conference on Economic, Management, Business and Accounting, ICEMBA 2022, 17 December 2022, Tanjungpinang, Riau Islands, Indonesia, Tanjungpinang, Indonesia. https://doi.org/10.4108/eai.17-12-2022.2333274
Nouraldeen, R. M., Mandour, M., & Hegazy, W. (2021). AUDIT REPORT LAG: DO COMPANY CHARACTERISTICS AND CORPORATE GOVERNANCE FACTORS MATTER? EMPIRICAL EVIDENCE FROM LEBANESE COMMERCIAL BANKS.
Ogoun, S., Edoumiekumo, A. R., & Nkak, P. E. (2020). Audit Committee Attributes and Audit Report Lag of Quoted Industrial Companies in Nigeria. Journal of Business and Managemen, 22(5), 1–09. https://doi.org/10.9790/487X-2205050109
Oussii, A. A., & Boulila Taktak, N. (2018). Audit report timeliness: Does internal audit function coordination with external auditors matter? Empirical evidence from Tunisia. EuroMed Journal of Business, 13(1), 60–74. https://doi.org/10.1108/EMJB-10-2016-0026
Rahmansyah, A. I., Wardayati, S. M., & Miqdad, M. (2021). Audit Committee, Board, and Audit Report Lag. Wiga : Jurnal Penelitian Ilmu Ekonomi, 11(1), 19–30. https://doi.org/10.30741/wiga.v11i1.577
Salleh, Z., sal, S. R., & Ahmad, N. (2017). Audit Committee Financial Expertise and Audit Report Lag: Malaysia Further Insight. Asian Journal of Accounting and Governance, 8(December), 137–150. https://doi.org/10.17576/ajag-2017-08-12
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Agus Triyani, Zummi Asma Diana, Suhita Whini Setyahuni, Yulinda Setyaningrum
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Jurnal Reviu Akuntansi dan Keuangan is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
