The Effect of Corporate Governanceon Audit Report Timeliness in Indonesia

Darryl Lirungan, Senny Harindahyani,



Abstract

Financial Statements could be useful for the readers to make a decision. In order to rely on Financial Statements to make a decision, the Financial Statements should be relevant. To enhance the relevance of the Financial Statements, the Financial Statements should be published in a timely manner. This research utilizes the data of listed companies on the Indonesia Stock Exchange for period 2013 – 2016. The purpose of this research is to determine the effect of corporate (internal and external indicators) on audit report timeliness. The methodology used in this research is multiple linear regression. In conclusion, the result of this research suggested that board of commissionersindependence, audit committee size, audit committee meeting, firm performance, auditor type, and audit opinion have significant association with audit report timeliness. Meanwhile, audit committee qualification and audit tenure do not have significant association with audit report timeliness. In addition, the result suggested that audit tenure weaken the relationship between auditor type and audit report timeliness.

Save to Mendeley



Keywords

Audit Report Timeliness, Corporate Governance, Internal and External Indicators

Full Text:

PDF

References

Abbott, L. J.;S. Parker; andG.F. Peter. 2004. Committee Characteristics and Restatements. Auditing: A Journal of Practice and Theory, 23(1), 69–87.

Afify, H.A.E. 2009. Determinants of Audit Report Lag: Does Implementing Corporate Governance Have Any Impact? Empirical Evidence from Egypt.Journal of Applied Accounting Research, Vol. 10 No. 1, pp. 56-86.

Akhtaruddin, M.;M.A. Hossain;M. Hossain;and L. Yao. 2009, Corporate Governance and Voluntary Disclosure in Corporate Annual Reports of Malaysian Listed Firms”, Journal of Applied Management Accounting Research, Vol. 7 No. 1, pp. 1-19.

Alkhatib, K. and Q. Marji. 2012. Audit Reports Timeliness: Empirical Evidence from Jordan, Social and Behavioral Sciences, Vol. 62, pp. 1342-1349.

Al-Ajmi, J. 2008. Audit and Reporting Delays: Evidence From An Emerging Market, Advances in Accounting, Incorporating Advances in International Accounting, Vol. 24, pp. 217-226.

Alfredson, K., K. Leo, R. Picker, J. Loftus, K. Clark, V. Wise, and M. Dyki.2009.Applying International Financial Reporting Standards. 2nd ed., John Wiley and Sons Australia Ltd., Milton.

Apadore, K. and M. Noor. 2013. Determinants of Audit Report Lag and Corporate Governance in Malaysia, International Journal of Business and Management, Vol. 8 No. 15, pp. 151-163.

Ashton, R. H.;P.R. Graul;andJ.D. Newton. 1989. Audit Delay and the Timeliness of Corporate Reporting. Contemporary Accounting Research, 5(2), 657–673.

Bamber, E. M.;L.S. Bamber;and M.P. Schoderbek. 1993. Audit Structure and Other Determinants of Audit Report Lag: An Empirical Analysis. Auditing: A Journal of Practice and Theory, 12(1), 1–23.

Be´dard, J.and Y. Gendron. 2010. Strengthening the Financial Reporting Systems: Can Audit Committees Deliver? International Journal of Auditing, 14(2), 1–37.

Che-Ahmad, A.and S. Abidin. 2008. Audit Delay of Listed Companies: A Case of Malaysia. International Business Research, 1(4), 32–39.

Cohen, J.;G. Krishnamoorthy;and A. M. Wright. 2002. Corporate Governance and the Audit Process. Contemporary Accounting Research, 19(4), 573–594.

Dalton, D.R.;C.M. Daily;J.L. Johnson; and A.E. Ellstrand. 1999. Number of Directors and Financial Performance: A Meta-Analysis.Academy of Management Journal, Vol. 42 No. 6, pp. 674-686.

Dibia, N.O. dan J.C. Onwuchekwa. 2013. An Examination of The Audit Report Lag of Companies Quoted in The Nigeria Stock Exchange. International Journal of Business and Social Research, Vol. 3 (9): 8-16.

Dimitropoulos, P.E. and D. Asteriou. 2010. The effect of board composition on the informativeness and quality of annual earnings: empirical evidence from Greece.Research in International Business and Finance. Vol. 24 No. 2, pp. 190- 205.

Fama, E. F. and M. C.Jensen. 1983. Separation of ownership and control. Journal of Law and Economics, 26(2), 301–325.

Forum for Corporate Governance in Indonesia. 2002. Corporate Governance

Giroux, G.and A.J. McLelland. 2000. An Empirical Analysis of Auditor Report Timing by Large Municipalities. Journal of Accounting and Public Policy, 19, 263–281.

Givoly, D.and D. Palmon. 1982. Timeliness of Annual Earnings Announcements: Some Empirical Evidence. The Accounting Review, 57(3), 485–508.

Habib, A. and M.B.U. Bhuiyan. 2011. Audit Firm Industry Specialization and the Audit Report Lag.Journal of International Accounting, Auditing and Taxation, Vol. 20 No. 1, pp. 32-44.

Hashim, U.J. and R.A. Rahman. 2011. Board Independence, Board Diligence, Board Expertise and Impact on Audit Report Lag in Malaysian Market.Finance and Corporate Governance Conference 2011 Paper

Hassan, Y.M. 2016. Determinants of Audit Report Lag: Evidence from Palestine.Journal of Accounting in Emerging Economies. Vol. 6 No. 1, pp. 13-32.

Hussainey, K. and M. Wang. 2010. Voluntary Disclosure and Corporate Governance: Further UK Evidence. Working Paper, Stirling University, Stirling.

Ismail, K. N. I.andR. Chandler. 2004. The Timeliness of Quarterly Financial Reports of Companies in Malaysia. Asian Review of Accounting, 12(1), 1–18.

Iyoha, F.O. 2012. Company Attributes And The Timeliness Of Financial Reporting In Nigeria. Business Intelligence Journal, Vol. 5 (1): 41-49.

Kartika, A. 2009. Faktor-Faktor Yang Mempengaruhi Audit Delay Di Indonesia (StudiEmpiris pada Perusahaan-Perusahaan LQ 45 yang Terdaftar di Bursa Efek Jakarta). JurnalBisnisdanEkonomi, Vol. 16 (1): 1-17.

Lai, K.-W. and L.M.C. Cheuk. 2005. Audit Report Lag, Audit Partner Rotation and Audit Firm Rotation: Evidence from Australia. Working paper, Hong Kong Polytechnic University, Hung Hom, Hong Kong.

Lee, H. Y. andG. J.Jahng. 2008. Determinants of Audit Report Lag: Evidence from Korea – An Examination of Auditor – Related Factors. Journal of Applied Business Research, Vol. 24 No. 2

Lee, H.Y.;V. Mande; and M. Son. 2009, Do Lengthy Auditor Tenure and the Provision of Non-Audit Services by the External Auditor Reduce Audit Report Lags? International Journal of Auditing, Vol. 13 No. 2, pp. 87-104.

Lim, C.-Y. and H.-T.Tan.2010. Does Auditor Tenure Improve Audit Quality? Moderating Effects of Industry Specialization and Fee Dependence.Contemporary Accounting Research. Vol. 27 No. 3, pp. 923-957.

Lipton, M. and Lorsch, J.W. 1992. A Modest Proposal for Improved Corporate Governance.Business Lawyer, Vol. 59 No. 1, pp. 59-77

Dao, M. and T. Pham. 2014. Audit Tenure, Auditor Specialization and Audit Report Lag.Managerial Auditing Journal. Vol. 29 Issue: 6, pp.490-512, doi: 10.1108/MAJ-07-2013-0906

Mak, Y.T. and Y. Li. 2001. Seterminants of Corporate Ownership and Board Structure: Evidence from Singapore.Journal of Corporate Finance, Vol. 7 No. 3, pp. 235-256.

Mohamad-Nor, M. N; R. Shafie;andW.N. Wan-Hussin. 2010. Corporate Governance and Audit Report Lag in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 6 (2), 57-84

Naimi, M. N.; R.Shafie;andW.N. Wan-Hussin. 2010. Corporate Governance and Audit Report Lag in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 6(2), 57–84.

O’Sullivan, N. 2000. The Impact of Board Composition and Ownership on Audit Quality; Evidence from large UK companies. The British Accounting Review, 32(4), 397–414

Owusu-Ansah, S. and S. Leventis. 2006. Timeliness of Corporate Annual Financial Reporting in Greece. European Accounting Review, 15(2), 273–287.

Panjaitan, Z.F.; Wahidahwati;and L. Amanah. 2013. Faktor-Faktor yang Mempengaruhi Audit Delay Dan Timeliness AtasPenyampaianLaporanKeuangan. JurnalIlmuandRisetAkuntansi. Vol. 2 (11): 1-18.

Rahmat, M. M.;T.M. Iskandar;andN.M. Saleh. 2009. Audit Committee Characteristics in Financially Distressed and Non-Distressed Companies. Managerial Auditing Journal, 24(7), 624–638.

Republik Indonesia. 1995. Undang-undang No. 8 Tahun 1995 tentang Pasar Modal. Lembaran Negara RI Tahun 1995, No. 64. Sekretariat Negara. Jakarta

Republik Indonesia. 2016. Salinan Peraturan Otoritas Jasa Keuangan No. 29/POJK.04/2016tentang Laporan Tahunan Emiten Atau Perusahaan Publik. Lembaran Negara RI Tahun 2016, No. 150. Kementerian Hukum dan Hak Asasi Manusia. Jakarta

Saemargani, F.I. danI. Mustikawati. 2015. PengaruhUkuran Perusahaan, Umur Perusahaan, Profitabilitas, Solvabilitas, Ukuran KAP, Dan Opini Auditor Terhadap Audit Delay. Jurnal Nominal, Vol. 4 (2): 1-15.

Salleh, Z., J. Steward, andS. Manson. 2006. The impact of board composition and ethnicity on audit quality: Evidence from Malaysian companies. Malaysian Acccounting Review, 5(2), 61–83.

Sugianto, D. (July, 31st 2017). BEI Suspensi 16 Saham Sekaligus. Detikfnance. (https://finance.detik.com/bursa-dan-valas/d-3580122/bei-suspensi-16-saham-sekaligus; downloaded on September, 10th, 2017)

Syafina, D.C. (April, 8th 2013). Inilah Daftar Emiten yang Belum Rilis Kinerja 2012. Kontan.co.id. (https://investasi.kontan.co.id/news/inilah-daftar-emiten-yang-belum-rilis-kinerja-2012; downloaded on February, 14th, 2017)

Nelson, S.P. and S.N. Shukeri. 2011. Corporate Governance and Audit Report Timeliness: Evidence from Malaysia. Research in Accounting in Emerging Economies. 11(1).

Ika, S.R. and N.A.M. Ghazali. 2012. Audit Committee Effectiveness and Timeliness of Reporting: Indonesian Evidence.Managerial Auditing Journal. Vol. 27 Issue: 4, pp.403-424

Soltani, B. 2002. Timeliness of Corporate and Audit Reports: Some Empirical Evidence in the French Context. The International Journal of Accounting, 37, 215–246.

Turel, A. 2010. Timeliness of Financial Reporting in Emerging Capital Markets: Evidence from Turkey. Istanbul University Journal of the School of Business Administration, Vol. 39 (2): 227-240.

Wu, C.; C. Wu; and V.W. Liu. 2008. The release timing of annual reports and board characteristics. The International Journal of Business and Finance Research, Vol. 2 No. 1, pp. 103-108.

Yaacob, N.and A. Che Ahmad. 2012. Adoption of FRS and Audit Delay in Malaysia. International Journal of Economics and Finance, 4 (1), 167-176

Article Metrics

Abstract viewed : 39 times
PDF files downloaded : 8 times



Print ISSN : 1412-775X | online ISSN : 2541-5204 View My Stats