Curtin University Homepage
  • Library
  • Help
    • Admin

    espace - Curtin’s institutional repository

    JavaScript is disabled for your browser. Some features of this site may not work without it.
    View Item 
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item

    Audit quality and audit report lag: Case of Indonesian listed companies

    Access Status
    Fulltext not available
    Authors
    Rusmin, Rusmin
    Evans, John
    Date
    2017
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Rusmin, R. and Evans, J. 2017. Audit quality and audit report lag: Case of Indonesian listed companies. Asian Review of Accounting. 25 (2): pp. 191-210.
    Source Title
    Asian Review of Accounting
    DOI
    10.1108/ARA-06-2015-0062
    ISSN
    1321-7348
    School
    School of Accounting
    URI
    http://hdl.handle.net/20.500.11937/53185
    Collection
    • Curtin Research Publications
    Abstract

    Purpose: The purpose of this paper is to empirically examine the relation between two dimensions of auditor quality, namely, auditor industry specialization and auditor reputation and the audit report lag. Design/methodology/approach: The data collection focuses on companies listed on the Indonesia Stock Exchange for the financial year of 2010 and 2011. To ensure data homogeneity and reduce industry bias, this study focuses solely on manufacturing companies identified by the Indonesian Capital Market Directory. Findings: This study finds a negative and significant association between industry-specialist auditors and audit report timeliness. Companies audited by industry-specialist auditors have shorter audit delays. The authors also find evidence that Big 4 auditors perform significantly faster audit work than their non-Big 4 counterparts. In addition, this study reports a statistical and significant relationship between auditing complexity, companies' profitability, auditors' business risk, and industry classification and audit report lag. The results show that firms with a large number of subsidiaries and firms experiencing poorer financial performance are found to be associated with longer reporting delays. Moreover, audit report timeliness is found to be faster for companies in the low-profile industry sector and owned by family members. Research limitations/implications: Similar to other empirical investigations, this study is not without certain caveats. First, the period of audit report lag in this study reflects the audit work from the year-end to the audit report date. The authors do not consider audit work conducted outside this period in the analysis. Second, there are numerous control variables and although the authors have attempted to capture those variables to maintain the integrity of the research there are likely other excluded variables that may be important in explaining audit report timeliness. Finally, there are other factors, for example, an administrative approval process with the audit firm home office, which can affect audit report lags but have not been included in the model analysis. Future studies can seek to focus on refinements to the proxy measures for dependent and experimental variables. Practical implications: Insights drawn from this study may be of assistance to policy makers as they consider the costs and benefits associated with varying levels of audit market concentration as well as providing a snapshot of the level of non-compliance on audit timeliness in Indonesia. Originality/value: This study provides further empirical evidence on the relation between auditor quality and audit report lag using data from a different domestic setting. This study also enriches the auditor quality literature by employing industry-specialist and Big 4 auditors as a predictor for the timeliness of audit reports.

    Related items

    Showing items related by title, author, creator and subject.

    • The impact of surplus free cash flow and audit quality on earnings management the case of growth triangle countries
      Rusmin, Rusmin; Astami, Emita; Hartadi, B. (2014)
      © Emerald Group Publishing Limited.Purpose - The purpose of this paper is twofold. First, it investigates whether high free-cash-flow companies with low-growth opportunities (surplus free cash flow (SFCF)) are associated ...
    • Influence of auditor quality and audit committee effectiveness on earnings conservatism of Malaysian public listed firms
      Ahamad Rapani, Nor Hanani (2011)
      This study investigates whether earnings conservatism is significantly higher amongst Malaysian publicly listed firms subject to higher standards of ‗direct custodian excellence‘ of the financial reporting system relative ...
    • The role of audit quality and culture influence on earnings management in companies with excessive free cash flow: Evidence from the Asia-Pacific region
      Astami, E.; Rusmin, R.; Hartadi, B.; Evans, John (2017)
      Purpose - The purpose of this paper is to examine the effect of culture and audit quality on managers' decisions regarding accounting accruals. It focuses on companies experiencing excessive free cash flow, as these ...
    Advanced search

    Browse

    Communities & CollectionsIssue DateAuthorTitleSubjectDocument TypeThis CollectionIssue DateAuthorTitleSubjectDocument Type

    My Account

    Admin

    Statistics

    Most Popular ItemsStatistics by CountryMost Popular Authors

    Follow Curtin

    • 
    • 
    • 
    • 
    • 

    CRICOS Provider Code: 00301JABN: 99 143 842 569TEQSA: PRV12158

    Copyright | Disclaimer | Privacy statement | Accessibility

    Curtin would like to pay respect to the Aboriginal and Torres Strait Islander members of our community by acknowledging the traditional owners of the land on which the Perth campus is located, the Whadjuk people of the Nyungar Nation; and on our Kalgoorlie campus, the Wongutha people of the North-Eastern Goldfields.