Audit Committee Financial Expertise and Audit Report Lag: Malaysia Further Insight

Audit Committee Characteristics and Audit Report Lag: Evidence From Oman

“…In Jordan, Aljaaidi, Bagulaidah, Ismail and Fadzil (2015) found that, frequent audit committee meetings results to reduced delay in audit report. While other researchers found no relationship between audit committee meetings and audit report lag (see for example Baatwah et al, 2015a;Sultana et al, 2015;Salleh et al, 2017). Therefore, the following hypothesis is postulated: H4: Audit committee meeting is negatively associated with audit report lag.…”

“…Moreover, directors with financial expertise in audit committee are more efficient when they are independent (Sharma & Kuang, 2014). Salleh et al (2017) found that, audit committee financial expertise is not related to reducing audit report lag, while they did further examination if the board of director has a majority of independent directors, they revealed that audit committee financial expertise and independence significantly strengthen the timeliness of audit report. Some previous studies had found significant and negative association between audit committee independence and audit report lag (see for example Wan-Hussin & Bamahros, 2013;Sultana et al, 2015).…”

“…As stated by Bé dard, Chtourou and Courteau (2004), the process of financial reporting and overseeing is the key responsibility of audit committee, and that such responsibility can only be achieved through directors who have extensive knowledge and experience in finance. McMullen and Raghunandan (1996) and Salleh et al (2017) pointed out that, companies which suffer from financial problems give an indicator to the absence of financial experts in the audit committee. It is proven that audit committee financial expertise enhances significantly the demand for high audit quality (Yatim, Kent & Clarkson, 2006).…”

“…Audit lag is identified as the number of days from the end of company's fiscal year to the date of audit report (Swanson & Zhang, 2018). Some research has shown that audit report lag is critical because it is related to public's confidence in the audited financial reports (Sultana et al, 2015;Salleh, Baatwah &Ahmad, 2017). Delay of audit report jeopardises the quality of accounting information by not giving timely information to shareholders (Nor et al, 2010).…”

“…Past research had examined the relationship between AC characteristics (size, independence, financial expertise and meetings) and audit report lag (see for example Mohamad-Nor, Shafie & Wan-Hussin, 2010;Shukeri & Islam, 2012;Apadore & Noor, 2013;Abernathy, Beyer, Masli & Stefaniak, 2014;Sultana et al, 2015;Baatwah et al, 2015a;Salleh et al, 2017), however, the empirical findings from these studies were inconsistent. These researches mainly focused on data from developed markets like US and emerging markets such as Malaysia, where the legal framework is strict and the system of disclosure and transparency is developed.…”