Board characteristics, auditing characteristics and audit report lag in African Central Banks

Abstract

PurposeThe purpose of this paper is to examine the determinants of audit report lag in Sub-Saharan African Central Banks. In this case, the determinants were divided into two categories: independent variables and mediating variables. The independent variables, which were generated from board characteristics, included board size, board gender diversity, governor duality, audit committee size and audit committee meetings. The mediating variables were auditing characteristics and they comprised audit mandate, audit approach and audit quality.Design/methodology/approachThe study used data from 192 observations from African Central Banks' financial reports for the period 2000–2016. The data collected were analyzed using path analysis, whereby four regression models were run and tested simultaneously. From the analysis, the study determined total effects and then decomposed the total effects into direct and indirect effects.FindingsThe study results indicate that in the case of board characteristics, governor duality and audit committee size were found to have a positive influence on audit report lag. In the case of audit quality, only audit mandate was found to have a negative influence on audit quality in the Central Banks. However, the introduction of mediating variables increased the positive effect of governor duality and audit committee size, while also making board size and board gender diversity have a significant negative effect on audit report lag.Practical implicationsThe findings of this paper have implications for the practice and policy of the auditing and governance of Central Banks, which includes designing appropriate governance structures as well as proper auditing strategies.Originality/valueThis is the first study which has examined factors influencing audit report lag in Central Banks. Previous studies on Central Banks' governance have examined the independence and autonomy of the Central Banks, as well as their accounting. This paper extends prior studies by examining the effects of those factors. Another contribution is the study's application of auditing characteristics as mediating variables.

The Effect of Shariah Committee Composition on Malaysian Islamic Banks’ Audit Report Lag

“…Kaaroud et al (2020) found that the average delay in the audit report was 64 days. However, the number is lower than the delays reported by Chalu (2021) and Arda, Gororo, Grochalska, and Mohlala (2018) for African Central Banks, as well as that revealed by Zulfikar et al (2020) in Indonesia.…”

“…Audit report lag is defined as the length of time from a company's fiscal year-end to the audit report date (Chalu, 2021;Ishaku, Abdulkarim, & Mohammed, 2021;Ismail, Mansour, & Sayed, 2022;Kaaroud et al, 2020;Zulfikar et al, 2020). The maximum legal period to issue an audit report varies according to the country's respective laws.…”

The impact of internal corporate governance mechanisms on audit report lag: evidence from Tunisian listed companies

“…Indeed, this measure has been used by Barako and Brown (2008) and Prado-Lorenzo and Garcia-Sanchez (2010). Chalu (2021) finds that board gender diversity has a significant negative effect on ARL .…”

Factors Affecting Audit Report Lag: A Research on Financial Institutions in Turkey

“…H1: Return on assets has an impact on audit report latency. Chalu (2021) and Habib, Bhuiyan, Huang, and Miah (2019) found that the size of the board members had a positive effect on the audit report latency. In this context, the second hypothesis of the research was formed as follows.…”