The Substitution Role of Audit Committee Effectiveness and Audit Quality in Explaining Audit Report Lag

Husaini ()
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Husaini: Faculty of Economics and Business, Bengkulu University, 38371, Bengkulu, Indonesia Author-2-Name: Saiful Author-2-Workplace-Name: Faculty of Economics and Business, Bengkulu University, 38371, Bengkulu, Indonesia Author-3-Name: Fitrawati Ilyas Author-3-Workplace-Name: Faculty of Economics and Business, Bengkulu University, 38371, Bengkulu, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:

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Abstract: Objective � This study aims to examine the relationship between audit committee effectiveness on Audit Report Lag (ARL), and the moderating effect of audit quality on the relationship between audit committee effectiveness and ARL. Methodology/Technique � 109 non-financial Indonesian listed companies are examined from 2012 to 2016. The data is analysed using multivariate regression analysis. Findings � The results show that audit committee effectiveness negatively affects ARL. This indicates that an effective audit committee can accelerate the delivery of audit reports. The results on the interaction between audit committee effectiveness and audit quality also negatively affects ARL. These results indicate that audit quality strengthens the influence of audit committees on the timeliness of financial reporting by reducing audit report lag. Novelty � The results show that there is a relationship of substitution between audit committee effectiveness and audit quality (Big-4) on ARL. The results of this study are consistent with agency theory which states that the implementation of corporate governance, such as an effective audit committee and audit quality, can improve the quality of financial reports. Type of Paper: Empirical.

Keywords: Audit Committee Effectiveness; Audit Quality; Audit Report Lag; Agency Theory. (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Pages: 10
Date: 2019-03-18
New Economics Papers: this item is included in nep-acc and nep-sea
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Published in Accounting and Finance Review, Volume 4, Issue 1

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