The association between institutional monitoring, political connections and audit report lag: evidence from the Malaysian capital market

Ameen Qasem

Journal of Accounting in Emerging Economies, 2024, vol. 15, issue 1, 1-28

Abstract: Purpose - This study aims to examine the association between institutional investors’ ownership (IOW), politically connected firms (POCF) and audit report lag (AUDRL). Design/methodology/approach - This study employs a feasible generalised least squares (FGLS) model for panel data to examine the association between IOW, POCF and AUDRL for Malaysian publicly listed companies. Findings - The findings reveal a statistically significant negative relationship between IOW and AUDRL, with this negative relationship being more pronounced amongst POCF. Additionally, the results demonstrate that the relationship between IOW and AUDRL varies depending on the domicile of IIs (local vs. foreign). Specifically, local institutional investors exhibit a negative and statistically significant relationship with AUDRL, whilst foreign institutional investors show a positive and statistically significant relationship with AUDRL. Originality/value - The results of this study provide a new understanding of auditor responses to institutional investor monitoring and political connections (PCs) in an emerging economy.

Keywords: Institutional investors ownership; Political connections; Institutional domiciles; Audit report lag; Malaysia (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaeepp:jaee-08-2023-0238

DOI: 10.1108/JAEE-08-2023-0238

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