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Article
Publication date: 29 April 2021

Mine Aksoy, Mustafa Kemal Yilmaz, Nuraydin Topcu and Özgür Uysal

The purpose of this study is to investigate the effects of ownership structure, board attributes and eXtensible Business Reporting Language (XBRL) on annual financial reporting

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Abstract

Purpose

The purpose of this study is to investigate the effects of ownership structure, board attributes and eXtensible Business Reporting Language (XBRL) on annual financial reporting timeliness of non-financial companies listed on Borsa Istanbul (BIST).

Design/methodology/approach

To conduct the analyses, the authors used two samples. The main sample consists of 187 companies, while the subsample includes 54 companies in the BIST 100 index. The data set covers the 2010–2018 period. To investigate the influence of ownership structure, board attributes and XBRL on timeliness, panel regression and univariate analyses were used. To explore the factors associated with the likelihood of late filing, panel logistic regression analyses were employed.

Findings

The findings provide evidence that companies that have a high level of institutional ownership and women board membership file earlier. In line with prior studies, profitable companies file their accounts faster. Highly leveraged companies are late reporters. Further, XBRL has a positive influence on the filing of financial reports for the BIST 100 companies due to technological agility. Finally, companies that have less institutional ownership and that get qualified audit opinions are more subject to late filing.

Research limitations/implications

The authors acknowledge that this study has certain limitations. First, the results may not be generalized to the entire BIST population due to the exclusion of financial companies from the samples. Future research may explore the financial reporting timeliness of these companies. Second, the study did not investigate the relationship between timeliness and the information content in financial statements and the market reactions they arouse. Third, this study is trying to find out early evidence on the mandatory adoption of XBRL filings, which cover only three-year period due to the recent implementation of this regulatory practice. Thus, it needs further elaboration after the accumulation of data in the forthcoming years by the expansion of the sample beyond the 2016–2018 period. As companies would have more time to become familiar with XBRL, a more reliable conclusion may be drawn. Further, the study particularly focuses on the effect of XBRL adoption on the timeliness among filers. XBRL could also influence investors, auditors and other stakeholders. Future research could investigate the influence of XBRL on different stakeholders to produce more insightful implications.

Practical implications

This study offers several implications for managers, regulators and policy makers. First, companies that do not make timely financial reporting may find it more difficult to attract long-term capital by means of institutional investors. Since these investors view timely reporting as an ideal ingredient in corporate governance, it may have a positive impact on company reputation and corporate sustainability. The results also provide insights for regulatory authorities, policy makers and auditors on the causes of the reporting lag, thereby increasing their awareness and helping them in their decision-making process since improvements in timely availability and accessibility of financial information reduce information asymmetry for users and increase market efficiency. Additionally, companies that reduce their filing timeframe will be able to compare their results with other companies. However, the XBRL mandate could be much more burdensome to smaller firms. This may stem from the fact that larger firms may tend to use the in-house approach for XBRL and can afford more advanced financial reporting systems with automated coding algorithms attached to streamline their XBRL filings, whereas smaller firms are more likely to use the outsourcing approach due to the difference in the level of resources available for XBRL preparation. This finding also lends support to recent concerns that new technology creates an unleveled benefit in reporting efficiency for large companies, but not for small ones (e.g. Blankespoor et al., 2014). This benefit may change the dynamics of the financial market and information environment, leading to further segmentation of the capital markets. The positive effects of XBRL adoption may accrue over time due to the potential benefits of learning curve experience since the XBRL mandate will help companies automate their reporting process and information processing, thereby strengthening internal control over financial reporting (Deloitte, 2013; Du et al., 2013; Li, 2017). Companies may also efficiently incorporate auditor-proposed adjustments by cross-referencing impacted accounts and prepare revised versions of the financial reports, which are automatically rendered in various formats for auditors to assess (Wu and Vasarhelyi, 2004). Finally, investors and other users of financial information benefit from having quicker access to data, since this allows them to make more timely and reliable decisions, leading to greater benefits.

Originality/value

This paper contributes to the literature on the impact of adopting XBRL on the timeliness of financial reporting in emerging markets. Second, this study extends the literature and provides evidence on determinants of timeliness, covering both ownership structure and board attributes besides firm-specific characteristics. Hence, it provides valuable insights for companies, investors, auditing firms and policy makers.

Details

Journal of Applied Accounting Research, vol. 22 no. 4
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 1 January 2004

Ku Nor Izah Ku Ismail and Roy Chandler

This study examines the timeliness of quarterly financial reports published by companies listed on the Kuala Lumpur Stock Exchange (KLSE). In addition, this study extends prior…

Abstract

This study examines the timeliness of quarterly financial reports published by companies listed on the Kuala Lumpur Stock Exchange (KLSE). In addition, this study extends prior research by determining the association between timeliness and each of the following company attributes ‐ size, profitability, growth and capital structure. An analysis of 117 quarterly reports ended on 30 September 2001 reveals that all, except one company reported within an allowable reporting lag of two months. However, a large number of companies were making the most of the time given to announce their quarterly reports. The study also provides evidence that there is a significant association between timeliness and each of the four company attributes, and the association is in the hypothesised direction. Plausible explanations for these findings are provided. The findings may provide some implications for future regulations and research regarding the timeliness of financial reporting in Malaysia.

Details

Asian Review of Accounting, vol. 12 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 4 August 2021

Fei Song and Jianan Zhou

This paper addresses the role of principles-based accounting standards as a potential mechanism for reducing firms' time delay of annual reporting disclosure while improving the…

Abstract

Purpose

This paper addresses the role of principles-based accounting standards as a potential mechanism for reducing firms' time delay of annual reporting disclosure while improving the timeliness of accounting information. The paper also contributes to the existing literature by addressing the mediating effects of the financial reporting complexity and the audit workload on the link between principles-based accounting standards and the time delay of annual reporting disclosure.

Design/methodology/approach

The focus is placed on an unbalanced panel of 20,943 samples over the period of 2007–2017.

Findings

The results show that the more principles-based the accounting standards are, the lower the time delay of annual reporting disclosure is, and the timelier the disclosure of accounting information is. The relationship between the two is more significant especially in the first two months after the end of the fiscal year. The findings are all robust after controlling for a series of sensitivity checks and endogenous concerns. From the mediating effect results, the authors find that principles-based accounting standards decrease the financial reporting complexity and the audit workload which in turn can help lower time delay of annual reporting disclosure. In addition, the negative effect of principles-based accounting standards on the time delay of annual reporting disclosure is more significant in the case that the company has “good news” including with no losses and receiving the standard auditing opinions. The results confirm the law of “good news announces early, bad news announces late.” Furthermore, the moderating effect results show that the higher the economic policy uncertainty index and the legal environment index, the lower the benefit of principles-based accounting standards to the timeliness of annual reports. The results of the economic consequences of timeliness suggest that the timely disclosure of accounting reporting will bring greater market reaction and contain more information, and the information of companies that disclose annual reports timely are more transparent.

Originality/value

This paper studies the impact of accounting standards on the timeliness of annual report disclosure, which enriches the literature in the field of macro policies and micro-enterprise behaviors.

Details

Asian Review of Accounting, vol. 29 no. 3
Type: Research Article
ISSN: 1321-7348

Keywords

Open Access
Article
Publication date: 10 February 2022

Ibrahim El-Sayed Ebaid

The purpose of this study is to examine the nexus between corporate characteristics and timeliness of financial reporting in Saudi Arabia. Specifically, this study investigates…

2046

Abstract

Purpose

The purpose of this study is to examine the nexus between corporate characteristics and timeliness of financial reporting in Saudi Arabia. Specifically, this study investigates the relationship between financial reporting timeliness and both corporate size, profitability, leverage and institutional ownership.

Design/methodology/approach

A sample of 67 of nonfinancial companies listed in the Saudi market during the period 2015–2018 was used. Multivariate regression analysis was performed to analyze the relationship between the four corporate characteristics and timeliness of financial reporting.

Findings

The findings revealed that financial reporting timeliness is significantly correlated with three of the corporate's characteristics, which are company size, profitability and leverage, while there is no significant effect of institutional ownership on the timeliness of financial reporting.

Research limitations/implications

The findings of this study may not be generalizable to all companies listed in the Saudi market as a result of limiting the study to nonfinancial companies and excluding financial companies from the sample. Future research may explore the determinants of the timeliness of these companies' financial reporting.

Practical implications

Given the significant interest expressed by investors, regulators and researchers in the field of financial reporting timeliness, especially in emerging markets where financial reports are almost the main and only source of information, this study highlights the role that corporate characteristics play in influencing the financial reporting timeliness in Saudi Arabia as one of emerging markets.

Originality/value

Despite the importance of financial reporting timeliness, there are very few studies that have examined this issue in Saudi Arabia. This study contributes to bridging this gap by examining the relationship between the corporate characteristics and the timeliness of financial reports.

Details

Journal of Money and Business, vol. 2 no. 1
Type: Research Article
ISSN: 2634-2596

Keywords

Article
Publication date: 1 May 2019

Saeed Rabea Baatwah, Zalailah Salleh and Jenny Stewart

The purpose of this paper is to investigate whether the characteristics of the audit committee (AC) chair affect audit report timeliness. In particular, the direct association…

1932

Abstract

Purpose

The purpose of this paper is to investigate whether the characteristics of the audit committee (AC) chair affect audit report timeliness. In particular, the direct association between AC chair accounting expertise and audit report delay, and the moderating effect of other characteristics of AC chair on this association are examined.

Design/methodology/approach

To achieve the purpose of this study, the characteristics examined by this study are AC chair expertise, shareholding, tenure and multiple directorships. Furthermore, a sample of Malaysian companies during the period 2005–2011 and the fixed effects panel data method are utilized.

Findings

The results suggest that an AC chair with accounting expertise is associated with a reduction in audit delay. The reduction is more obvious when the chair holds shares in the company, but is weakened by longer tenure and multiple directorships. These results are robust after conducting several robust tests. Using mediating analysis, the authors also document that an AC chair with accounting expertise can enhance the timeliness of audit reports even when the quality of financial reporting is lower. The reported result is supported by additional analysis that finds that AC chairs with accounting expertise and AC chairs with accounting expertise and shareholding are significantly associated with shorter abnormal audit delay.

Originality/value

This study provides comprehensive analysis concerning the association between AC chair and audit report timeliness using a unique setting. It is among the limited evidence that reports the moderating effect of AC chair characteristics on the role of such chair on audit report timeliness.

Details

Asian Review of Accounting, vol. 27 no. 2
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 5 October 2015

Saeed Rabea Baatwah, Zalailah Salleh and Norsiah Ahmad

This paper aims to hypothesise that demographic characteristics of managers play a significant role in performing their duties amongst which is financial reporting. This study…

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Abstract

Purpose

This paper aims to hypothesise that demographic characteristics of managers play a significant role in performing their duties amongst which is financial reporting. This study aims to examine whether CEO characteristics, namely, tenure and financial expertise, are associated with audit report timeliness.

Design/methodology/approach

Data from companies listed on the Oman capital market between 2007 and 2011 and three proxies for audit report timeliness are used.

Findings

CEO tenure and CEOs with financial expertise are reported to be associated with timely audit reports. Supplementary tests also confirmed this result. In addition, it is suggested and documented that there is an interaction effect between CEO tenure and financial expertise concerning the timeliness of audit reports. The use of a two-stage least square analysis also supported the main results.

Research limitations/implications

Hypotheses were tested using data from Oman with a relatively small sample size. Therefore, only a few characteristics of the CEO were considered and a more sophisticated approach of testing managers’ effect on company policies was unable to be used. In addition, the generalisability of the study findings should be made carefully.

Originality/value

This paper differs from prior studies, in that it extends the audit report timeliness literature by examining whether the CEO tenure and CEOs with financial expertise are associated with audit report timeliness. Findings demonstrate that CEO characteristics are important factors for a timely audit report.

Details

Managerial Auditing Journal, vol. 30 no. 8/9
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 13 April 2012

Siti Rochmah Ika and Nazli A. Mohd Ghazali

The purpose of this paper is to examine the association between audit committee effectiveness and timeliness of reporting. Specifically, the paper investigates whether there is…

6922

Abstract

Purpose

The purpose of this paper is to examine the association between audit committee effectiveness and timeliness of reporting. Specifically, the paper investigates whether there is any relationship between effectiveness of an audit committee and submission of audited financial statements to the Indonesian Stock Exchange (IDX).

Design/methodology/approach

Audit committee effectiveness is measured by an index based on the framework developed by DeZoort et al. Timeliness of reporting is defined as the number of days that elapses between a company's financial year‐end and the day on which its audited financial statement is received by the IDX. The sample comprises 211 non‐financial Indonesian listed companies. Multivariate regression analysis was performed to analyse the relationship between audit committee effectiveness and timeliness of reporting.

Findings

The findings show that timeliness of reporting is associated with audit committee effectiveness. This result suggests that audit committee effectiveness is likely to reduce the financial reporting lead time, i.e. the time taken by companies to publicly release audited financial statements to the stock exchange.

Research limitations/implications

The audit committee effectiveness index employed in this study was based on DeZoort et al.'s framework. There could be other aspects of audit committee effectiveness such as the organizational context or multiple‐directorship which had not been addressed in the present study. Thus, future research may consider and examine these other aspects in developing a more comprehensive index.

Practical implications

The findings suggest that audit committee effectiveness is a significant factor ensuring timely submission of audited financial statements. Thus, companies perhaps can re‐look into how to further improve audit committee effectiveness in order to enhance timeliness of financial reporting.

Originality/value

Unlike the majority of prior studies which investigated the association between the presence/absence of audit committee and timeliness of reporting, this study is one of few which examined the relationship between effectiveness of audit committee and timeliness of reporting in an emerging country.

Article
Publication date: 13 January 2012

Robert W. McGee and Xiaoli Yuan

Timeliness of financial reporting is one of the attributes of good corporate governance identified by the OECD and World Bank. Shareholders and other stakeholders need information…

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Abstract

Purpose

Timeliness of financial reporting is one of the attributes of good corporate governance identified by the OECD and World Bank. Shareholders and other stakeholders need information while it is still fresh and the more time that passes between year‐end and disclosure, the more stale the information becomes and the less value it has. This paper aims to examine the timeliness of financial reporting in the People's Republic of China and to compare it to timeliness in the USA and the European Union (EU).

Design/methodology/approach

The timeliness of financial reporting was measured by counting the number of days that elapsed between year‐end and the date of the independent auditor's report for Chinese companies listed on the Shanghai Stock Exchange and a selection of public companies in the USA and EU. Results were then compared to determine whether there was a significant difference. This study also compares timeliness data on the basis of audit firm to determine whether companies audited by one of the Big‐4 firms are more timely in their financial reporting than are companies audited by Chinese audit firms.

Findings

The paper finds that Chinese companies took significantly longer to report financial results than either the EU or US companies. EU companies took significantly longer to report financial results than US companies. The vast majority of Chinese company audits were not conducted by the Big‐4 accounting firms.

Practical implications

Companies that are not timely in their financial reporting practices find it more difficult to attract capital. Their corporate governance practices are also seen as less than ideal, which has a negative effect on a company's reputation within the financial community. Thus, Chinese companies that are slow in reporting their financial results may suffer negative consequences in terms of reputation and ability to raise capital, all other things being equal.

Originality/value

This paper is the first to compare the timeliness of financial reporting for the People's Republic of China, the USA and the European Union.

Details

Journal of Asia Business Studies, vol. 6 no. 1
Type: Research Article
ISSN: 1558-7894

Keywords

Article
Publication date: 28 February 2023

Mohammed Ali Almuzaiqer, Maslina Ahmad and A.H. Fatima

This study investigates how the timeliness of financial reporting by listed companies in the United Arab Emirates (UAE) is influenced by the interaction effect between…

Abstract

Purpose

This study investigates how the timeliness of financial reporting by listed companies in the United Arab Emirates (UAE) is influenced by the interaction effect between industry-specialist auditors and board governance.

Design/methodology/approach

The Emirati capital markets – the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) – were used to obtain the data, which covered the seven-year period between 2011 and 2017. In total, 385 observations were obtained. Descriptive statistics and multiple regression were the principal statistical tests employed using the panel data method.

Findings

The results of the direct effect tests reveal that board independence and industry-specialist auditors have no significant influence on financial reporting timeliness. Nevertheless, the results also show that the timeliness of financial reporting by listed companies in the UAE is influenced by the interaction effect between auditors' industry specialisation and the governance of firm boards. More specifically, the results reveal that financial reporting timeliness is positively associated with board independence for companies audited by industry-specialist auditors. This finding is consistent with the notion that industry-specialist auditors complement the role of effective board governance.

Research limitations/implications

This study only focuses on secondary data from non-financial companies listed in the UAE markets. Therefore, the outcomes may not be generalisable to sectors related to finance. Future researchers are recommended to examine financial sectors and apply alternative measurements such as surveys or interviews with directorial boards and external auditors. Furthermore, this study used only one measure of industry-specialist auditors, while board governance was limited to board independence. Future studies could utilise different measurements for industry-specialist auditors and more board governance measures to obtain more robust findings.

Practical implications

The evidence provided indicates that when a company listed in the UAE has a high-quality board, it benefits by engaging auditors who specialise in the industry in terms of improving the timeliness of financial reporting. The findings also indicate the need for closer monitoring of management to safeguard their reputation. This might attract the attention of the Big Four audit firms and industry–specialist auditors to continuously re-evaluate their audit work, professional training and staff skills, while they might also try to differentiate their performance and monitoring capabilities from the non-Big Four audit firms and non-industry specialist auditors.

Originality/value

The main contribution of this study to the overall body of research is the concept that having independent directors is associated with improved reporting timeliness because financial reports are monitored with greater efficiency by industry–specialist auditors. This study provides evidence for the interaction effect between internal and external governance mechanisms on financial reporting quality, which has not been the focus of prior studies on financial reporting quality.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

Book part
Publication date: 15 December 2011

Sherliza Puat Nelson and Siti Norwahida Shukeri

Purpose – The purpose of this study is to examine the impact of corporate governance characteristics on audit report timeliness in Malaysia. The corporate governance…

Abstract

Purpose – The purpose of this study is to examine the impact of corporate governance characteristics on audit report timeliness in Malaysia. The corporate governance characteristics examined are board independence, audit committee size, audit committee meetings and audit committee members' qualifications.

Design/Methodology/Approach – The sample comprises of 703 Malaysian listed companies from Bursa Malaysia, for the year 2009. It excludes companies from the finance-related sector as they operate under a highly regulated regime under supervision by the Central Bank of Malaysia. Further, regression analysis was performed to examine the audit report timeliness determinants.

Findings – Results show that audit report timeliness is influenced by audit committee size, auditor type, audit opinion and firm profitability. However, no association was found between board independence, audit committee meetings, audit committee members' qualifications and audit report timeliness.

Research limitations/Implications – It is a cross-sectional study of the year 2009. Practical implications for policy makers are consideration of the minimum submission period for audit reports Regulators' support for firms to have larger audit committee sizes is also discussed.

Originality/Value – The study investigates the impact of corporate governance on audit timeliness in light of the recent amendments to the Malaysian Code of Corporate Governance made in 2007.

Details

Accounting in Asia
Type: Book
ISBN: 978-1-78052-445-0

Keywords

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