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The purpose of this paper is to examine the effect of culture and audit quality on managers’ decisions regarding accounting accruals. It focuses on companies experiencing excessive free cash flow, as these companies have been associated with an agency problem.

This study measures the magnitude of discretionary accruals as a proxy for earnings management using the cross-sectional modified Jones model. Excessive free cash flow is scrutinized by the method used by Chung et al. (2005). Listed companies in nine countries in the Asia-Pacific region are represented in this study. The statistical analyses are used to examine the influence of cultural aspect, the role of external monitoring by high-quality auditors and the earnings management practice in the companies with excessive free-cash-flow.

The empirical results presented in this paper provide support for the proposition that managers of companies with excessive free-cash-flow will make investment decisions that are not always in the best interest of the shareholders and use accounting discretion to increase reported earnings. This study provides empirical evidence that these companies have been associated with an agency problem and the role of external auditor persists in a setting, where cultural differences prevail in across countries.

In cross-border trade and investment, the findings provide the opportunity to exploit a setting, where cultural differences prevail, whereas other potentially influential variables, including the role of external monitoring by high-quality auditors, are relatively constant across countries.

Previous studies (Leuz et al., 2003; and Enomoto et al., 2015) examine factors influencing earnings management internationally have concentrated on legal institutions and investor protection. Han et al. (2010) completed a cross-country study on the effects of national culture on earnings management. This study focuses on companies across countries experiencing with excessive free cash flow and examines the cultural aspect and the effectiveness of external monitoring by high-quality auditors operating in different countries in mitigating managerial opportunism.

This paper aims to explore the potential effect of key audit matters (KAM) on the audit report lag (ARL). In particular, it aims to discover whether the number of KAMs reported by an audit firm in Jordan is related to the length of its ARL.

The authors analysed data from the first three years of KAM reporting in Jordan (2017–2019) for 194 public listed Jordanian companies to examine the relation between the number of KAMs and the ARL, taking into account several control variables related to the Jordanian context.

This study found that there is no statistically significant relation between the number of KAMs reported by Jordanian audit firms and their ARLs, suggesting that the KAM reporting in Jordan is somewhat superficial, with the selection of what is actually reported as a KAM not directly related to the efforts needed to deal with its concerns. However, this study also found statistically significant positive relations between the ARL and each of audit fees, audit firm size, the issuance of a qualified audit opinion and company leverage and a statistically significant negative relation between the ARL and company profitability.

This is one of the very few studies to cover the potential relation between KAM reporting and the ARL. In a developing country context characterised by limited demand for an external audit of high quality, this study finds that auditors may decouple on their reporting of KAMs by not actually making significant efforts to deal with them.

The purpose of this paper is to empirically examine the relation between two dimensions of auditor quality, namely, auditor industry specialization and auditor reputation and the audit report lag.

The data collection focuses on companies listed on the Indonesia Stock Exchange for the financial year of 2010 and 2011. To ensure data homogeneity and reduce industry bias, this study focuses solely on manufacturing companies identified by the Indonesian Capital Market Directory.

This study finds a negative and significant association between industry-specialist auditors and audit report timeliness. Companies audited by industry-specialist auditors have shorter audit delays. The authors also find evidence that Big 4 auditors perform significantly faster audit work than their non-Big 4 counterparts. In addition, this study reports a statistical and significant relationship between auditing complexity, companies’ profitability, auditors’ business risk, and industry classification and audit report lag. The results show that firms with a large number of subsidiaries and firms experiencing poorer financial performance are found to be associated with longer reporting delays. Moreover, audit report timeliness is found to be faster for companies in the low-profile industry sector and owned by family members.

Similar to other empirical investigations, this study is not without certain caveats. First, the period of audit report lag in this study reflects the audit work from the year-end to the audit report date. The authors do not consider audit work conducted outside this period in the analysis. Second, there are numerous control variables and although the authors have attempted to capture those variables to maintain the integrity of the research there are likely other excluded variables that may be important in explaining audit report timeliness. Finally, there are other factors, for example, an administrative approval process with the audit firm home office, which can affect audit report lags but have not been included in the model analysis. Future studies can seek to focus on refinements to the proxy measures for dependent and experimental variables.

Insights drawn from this study may be of assistance to policy makers as they consider the costs and benefits associated with varying levels of audit market concentration as well as providing a snapshot of the level of non-compliance on audit timeliness in Indonesia.

This study provides further empirical evidence on the relation between auditor quality and audit report lag using data from a different domestic setting. This study also enriches the auditor quality literature by employing industry-specialist and Big 4 auditors as a predictor for the timeliness of audit reports.

This study aims to investigate whether organizational complexity (hereafter firm complexity) increases audit report lag (ARL) in a unique environment of GCC countries.

The research study uses a panel data set of 6,084 firm-year observations of nonfinancial firms from GCC economies from 2009 to 2022. First, the study uses an ordinary least square estimator to examine the association of firm complexity with ARL. Second, for robustness purposes, the study applies the propensity score matching technique.

This research study finds that the firms’ complexity increases ARL. Supporting the argument that auditors respond to firm complexity with increased effort, the authors find a positive relation of firm complexity with ARL. This relationship is augmented by auditor change, auditors’ tenure, auditor-qualified opinion and adoption of IFRS. In addition, the authors also find that Big-4 and audit firm industry specialization curtail the positive impact of firm complexity on ARL.

Firms in the GCC have less time to complete their audit and complex firms are likelier to have bigger ARLs. This study provided evidence regarding the curtailing effect of audit quality in GCC. Our findings suggest policymakers and reformers choose improved audit quality to reduce the possibility of larger ARL.

This study enriches the scholarship by presenting a mechanism for reducing the ARL of complex firms through higher audit quality. This study contributes to agency theory by emphasizing audit quality’s important role in emerging markets.

Based on semi‐structured interviews with current senior officers of the Indonesian Police Force, Indonesian Attorney General's Office and the Indonesian Financial Transaction Reports and Analysis Centre (Pusat Pelaporan dan Analisis Transaksi Keuangan), the purpose of this paper is to consider the regulator context and governance of some key issues in Indonesia's anti‐money laundering (AML) regime: the progress of “know your customer” implementations and the crackdown on foreign bribery.

Interviewing respondents from key Indonesian agencies involved in the AML regime, the authors used semi‐structured interviews to develop a narrative analysis of the research questions.

The results of the narrative analysis suggest all three agencies are satisfied with the effectiveness of “know your customer” regulations, particularly in their capacity to heighten awareness. All respondents, however, were a little more circumspect on the foreign bribery crackdown.

The paper shows that at best, mutual legal assistance provided help for transaction reports and analysis. At worst, it appears foreign bribery issues are an intractable problem. It is concluded that policy tools need to be contextualised within Indonesia's socio‐economic realities rather than wholly struck from western fields.

Fresh “insider” insights were gleaned about the current state of play regarding “know your customer” principles and the clampdown on foreign bribery. This is of value to many parties involved in the advancement of AML, both within and outside Indonesia.

The purpose of this paper is to examine the association between the magnitude of earnings management and auditor quality. It focuses on earnings management in response to mounting pressure amongst investors, policy makers and corporate governance reformists for mechanisms to curb excessive opportunistic behavior amongst corporate management. Auditor quality is the main focus of this study analysis as this factor is considered to be a key determinant of earnings management.

The cross‐sectional modified Jones model is used to measure discretionary accruals (the proxy for earnings management). Following prior studies (Pearson and Trompeter, Craswell et al., Hogan and Jeter, DeFond et al., Ferguson and Stokes), the author uses audit firm industry specialization to proxy auditor quality.

The paper presents evidence of a negative association between auditor quality and the earnings management indicator. This finding infers that the magnitude of earnings management amongst firms engaging the services of a specialist is significantly lower than firms purchasing audit services from a non‐specialist auditor. In addition, this study also reveals that the magnitude of earnings management is significantly lower amongst companies engaging a Big 4 specialist audit firm relative to companies using the audit services of a Non‐Big 4 specialist.

Insights drawn from this study may be of assistance to policy makers as they consider the costs and benefits associated with varying levels of audit market concentration. The findings provide stronger support for allowing the audit market to operate in a basic laissez‐faire manner without any overbearing interference by policy makers. Given industry specialization is likely to play an increasingly important role in audit value in the future, policy makers and reformists play an important role in encouraging firms to use the services of, especially, Big 4 specialist auditors.

The purpose of this research is to investigate the factors determining the social and environmental reporting (SER) of Indian textile and apparel (TA) firms.

The 2010 annual reports of a sample of top 100 Indian TA firms listed on the Bombay Stock Exchange were examined to assess the extent of SER. SER was assessed based on the Global Reporting Initiative index applicable to the TA industry. Multiple regression analysis was conducted to investigate the determinants of SER.

This study reports a low extent of SER in the annual reports of Indian listed TA firms, with a mean disclosure of 14 per cent. On average, firms reported more extensive environmental information, with a mean disclosure of 18.4 per cent, compared to social information, with a mean disclosure of 10.7 per cent. Most firms reported social information relating to “labour practices and decent work”, while the reporting of information relating to “human rights” was sparse. Overall, the SER patterns provide support for legitimacy theory. Consistent with legitimacy theory expectations, corporate size, brand development and audit committee size are significant factors determining the variation in SER. No significant relationship was found between board independence, level of ownership and SER.

There is no existing study specifically on SER by TA firms in India. In fact, there is surprisingly little research on SER in the Indian context in general. Given the dearth in research on corporate social reporting in the Indian context, the study extends prior literature on corporate SER by concentrating on SER of TA firms in an emerging economy. The theoretical contribution of this study is the testing of legitimacy theory in the context of an emerging economy. This study contributes towards practice by delineating the relationship between governance structure and SER, particularly with regard to issues such as child labour. These findings have implications for the future development of reporting standards and regulations in regard to corporate governance in India. The dearth of social reporting by Indian TA firms has implications for foreign purchasers of branded products, as international companies have been implicated in sub-optimal social or environmental practices or incidents.

The purpose of this paper is to test the association between audit quality and earnings management (EM). Audit quality studies documented that accruals would reduce when the auditor is independent or the audit firm is large.

This paper uses generalised least square regression to investigate the influence of audit quality on EM. The sample contained 86 companies listed on the Amman Stock Exchange from 2007 to 2010. The cross-sectional modified Jones model was employed to measure discretionary accruals as a proxy for EM.

This paper revealed that there is a significantly negative association between audit quality and EM. The result inferred that EM level is significantly lower among companies using the services of independent auditors. Moreover, this study exposed that the level of EM is significantly less among companies hiring a Big 4 audit firm, as compared to companies utilising the service of a non-Big 4 audit firm.

The measurement error, which is a rigorous concern for studies on EM, is one of the limitations in this study. Hence, the current study wholly inherited the limits of the modified Jones model.

The findings based on the current study would provide beneficial information for regulators in Jordan and other countries with an institutional environment similar to that of Jordan. Moreover, the results provided valuable information to investors in assessing the influence of audit quality on financial reporting quality (FRQ).

The current study contributed to auditing and corporate governance literature and its influence on EM among Jordanian companies. This research will be of value to companies seeking to reduce EM and enhance FRQ.

The purpose of this paper is to investigate whether partially privatised state‐owned‐enterprises (SOEs) perform significantly better than fully SOEs in the developing country of Indonesia.

This study uses a data set of 157 SOEs in Indonesia for the year 2006 to examine the issue of ownership structure and its performance.

Statistical analysis supports the hypothesis that SOEs with private sector ownership have higher levels of performance than those fully owned by the government. There are also significant differences in financial leverage, firm size, assets‐in‐place, financial statement reliability, and industry variances between fully privatised and partially privatised SOEs.

These findings support the Indonesian Government move towards further privatisation in that SOEs with at least some private sector ownership have greater performance levels.

The purpose of this paper is to provide a comparative analysis of the communication of the five major categories of risk (business, strategy, market and credit risk disclosure) over the volatile 2007-2009 global financial crisis (GFC) time period between Indonesia and Malaysia manufacturing listed companies.

A total of 300 firm years data are collected consisting of a random sample of 100 manufacturing listed companies’ annual reports for fiscal year-ends from 2007 to 2009. The reports include 50 annual reports of manufacturing companies per country, listed in the stock exchanges of Indonesia and Malaysia for this three-year GFC time period. This research adopts a researcher-constructed risk disclosure index (RDI) to create an index measuring the extent of risk disclosure by listed firms.

Key findings from statistical analysis are that country of incorporation and size help predict risk disclosure levels. Malaysian companies have significantly higher levels of business risk in 2007 and operating risk communication in 2007, 2008 and 2009 than Indonesian companies. These two countries have similar economic scenarios as developing countries which often have higher “business” risk for companies, but Malaysian companies disclose more risk information than Indonesia. The overall low disclosure levels (27.46-32.92 per cent for Indonesian companies and 35.20-39.04 per cent for Malaysian companies) highlight the potential for far higher communication of key risk factors in these two countries.

This study is important as it contributes to the literature by providing comparative insights into the voluntary risk disclosure practices of manufacturing companies in the two important Asian countries (Indonesia and Malaysia) over the GFC time period. There is lack of risk disclosure studies in manufacturing companies, especially in these two sample countries.