Audit committee traits impact on audit report lag: Evidence from non-financial listed entities

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Abstract

This study examines the influence of audit committee traits on the timeliness of financial reporting by Saudi non-financially listed entities. So, the study analyzes 300 observations spanning three years from 2020 to 2022 for 100 non-financial entities. This study adopts different statistical models, such as ordinary least squares (OLS) regression, along with the fixed development model and random effects model, to promote the underlying regression results. Agency and resource dependency theories were employed as theoretical frameworks to gain insight into the research results and hypotheses. This study shows that audit committee financial expertise (ACFE), prior experience (ACPE), and independence (ACIND) strongly affect the audit report lag (ARL). The findings provide insights for regulatory authorities, current and potential investors, and moneylenders regarding the determinants of the timeliness of audit reports. It suggests that the current audit committee regulations, especially those with financial expertise, ACPE, and ACIND, are effective in enhancing the timeliness of financial reporting. Moreover, it provides timely empirical evidence for the existing literature related to the presence of a relationship between specific traits of the audit committee and financial reporting timeliness (Abernathy et al., 2017; Sultana et al., 2015).

Keywords: Timeliness, Audit Committee, Audit Committee Traits, Audit Report Lag, Non-financial Entities

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: M0, M40, M41, M42, M48, M49

Received: 26.03.2024
Accepted: 20.09.2024
Published online: 25.09.2024

How to cite this paper: Alshammari, M. K. (2024). Audit committee traits impact on audit report lag: Evidence from non-financial listed entities. Risk Governance and Control: Financial Markets & Institutions, 14(3), 134–144. https://doi.org/10.22495/rgcv14i3p13