The relationship between audit report delay and investment opportunities

Zeinab Azami () and Tabandeh Salehi ()
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Zeinab Azami: Shahid Bahonar University of Kerman
Tabandeh Salehi: Shahid Bahonar University of Kerman

Eurasian Business Review, 2017, vol. 7, issue 3, No 7, 437-449

Abstract: Abstract Higher investment opportunities can increase audit risk. Therefore, external auditors need to extend the scope of their substantive tests and their audit work, and in turn, this leads to longer audit report delay. This study aims at investigating the relationship between audit report delay and the extent of investment opportunities among firms listed on Tehran stock exchange (TSE). We tested our hypotheses on a sample of 133 firms listed on TSE during the period 2006–2014, using multivariate regression analysis on panel data. Our results revealed that the audit report delay is longer for firms with higher investment opportunities. The research results also show that small companies, lost companies and companies that have major weakness in internal controls, are likely to have a longer delay in the audit report. The delay in the audit report of companies that had an independent auditor change is greater during the current period. The paper provides useful information for firms’ management and external auditors.

Keywords: Investment opportunities; Audit report delay; Audit risk; Independent auditors (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s40821-016-0070-4

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