Business Strategy and Auditor Report Lag: Do Board Characteristics Matter? Evidence from an Emerging Market

Aref M. Eissa, Ahmed Diab () and Arafat Hamdy
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Aref M. Eissa: Accounting Department, Majmaah University, Al Majma’ah 15341, Saudi Arabia
Ahmed Diab: Accounting Department, Prince Sultan University, Riyadh 12435, Saudi Arabia
Arafat Hamdy: Accounting Department, Majmaah University, Al Majma’ah 15341, Saudi Arabia

JRFM, 2025, vol. 18, issue 2, 1-20

Abstract: This study investigates the association between business strategy and audit report lag (ARL). In addition, it reveals the moderating influence of board characteristics on this relationship. We used data collected from Egyptian firms listed on EGX100 during the period from 2014 to 2019, which were analyzed using ordinary least squares and binary logistic regression models. Our study revealed a decrease in ARL for firms adopting cost leadership or differentiation strategies. In addition, we found that ARL decreased for cost leadership firms with a higher percentage of non-executive director and board meetings. Moreover, ARL decreased for firms adopting a differentiation strategy with a higher percentage of non-executive directors. This study contributes to the literature on the potential factors affecting the link between business strategy and the quality of financial reporting by focusing on ARL, which is rarely examined in the literature, especially in emerging markets such as Egypt. The findings of this study are valuable to investors, auditors, corporate management, and other stakeholders, who should consider particular board attributes to better predict ARL and ensure the effective adoption and implementation of business strategies.

Keywords: board of directors; business strategy; cost leadership; differentiation; audit report lag; Egypt (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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