The moderating role of key audit matters in the relationship between audit committee characteristics and audit report lag

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Abstract

The audit committee roles are essential to corporate governance because they are accountable in many aspects of financial governance. In order to understand the relationship between audit committee meeting (ACM) frequency, audit committee size (ACZ), and audit report lag (ARL) in Jordan, this study looked at the moderating effect of key audit matters (KAMs). A correlational research strategy was employed in the study. The data gathered from the 144 Jordanian enterprises for the period of 2016 to 2020 were disclosed in their published annual financial reports. The results show that, in terms of audit committee characteristics, there is no association between ARL and ACZ. Moreover, there is a non-significant relationship found between ACM and ARL. Furthermore, the outcome shows that KAMs and ARL are not significantly associated. On the connection between ACZ and ARL, however, the interaction impact of KAMs shows no moderating effect. Furthermore, the results show that the relationship between ACM and ARL is unaffected by the use of KAMs as a moderating variable. Given their influence on investor decisions, the study hereby advises businesses to pay close attention to the date of the external auditor’s report.

Keywords: Audit Report Lag, Key Audit Matters, Audit Committee Size, Audit Committee Meeting, Jordan

Authors’ individual contribution: Methodology — O.A.; Investigation — O.A. and S.I.; Resources — O.A., Z.S., and S.I.; Writing — O.A. and Z.S.; Supervision — O.A.; Funding Acquisition — O.A. and Z.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M41, M42, M48

Received: 12.06.2023
Accepted: 01.03.2024
Published online: 04.03.2024

How to cite this paper: Alhawamdeh, O., Salleh, Z., & Ismail, S. (2024). The moderating role of key audit matters in the relationship between audit committee characteristics and audit report lag. Corporate Governance and Organizational Behavior Review, 8(1), 243–251. https://doi.org/10.22495/cgobrv8i1p21