Corporate Governance Structure and Timeliness of Financial Report

Abstract

The main objectives of this research are to describe the obedience towards the regulation of timeliness financial report submission and to analyze the influence of financial performance and corporate governance structure to timelines of financial report submission. The research questions are tested by running Analysis of Variance (Anova) and two logistic regressions. Timelines (measured by dummy variable, 1 if the company comply financial report submissioni.e. before and at 31 of March, while 0 for delayed submission) is the dependent variable both in Anova and in logistic regression. The independent variables in logistic regression consist of EAT, ROA, ROE, Leverage, concentration ownership by domestic institution, number of the Board of Directors, number of the Board of Commissioners and Industry Classification. The first main result of this study is that there is an increasing of timelines obedience. This suggests that the obedience of listed companies towards the regulation of timelines is increasing form time to time. The second main result of this study is that there is an influence of profitability (ROA), leverage and corporate governance structure (ownership concentration by Domestic Institution/HI_DOM) to the probability of timelines financial report submission. The positive and negative sign of ROA and leverage respectively, suggest that higher ROA and lower leverage tend to obey the regulation of timelines. The negative sign of HI_DOM suggest that the lower ownership concentration by Domestic Institution tend to obey the regulation of timelines.

The Impact of Corporate Governance Factors and the COVID-19 Pandemic on the Publishing Date of Annual Reports of UK Listed Companies

“…The timeliness of submissions of financial reporting is considered vital for both external and internal users since it provides useful and updated information allowing them to make the right decisions (Gunarsih 2011;Beest et al 2009). Furthermore, previous literature reveals that the issuing date of annual reports is influenced by corporate governance.…”

“…This finding suggested that members who have financial background contribute to the enhancement of issuing date of annual financial reports. Gunarsih (2011) studied the effect of ownership concentration by the domestic institutions on the timeliness of financial reporting among Indonesian companies listed in the Indonesian stock exchange during the period of 1999-2007. The result of the study shows that there is a positive relationship between corporate governance structure (ownership concentration by domestic institution) and issuing date of annual financial reports.…”

“…The timeliness of financial reporting has been recognised as a vital qualitative attribute of financial information as it reflects the current financial position of companies, which leads to having financial information by decision-makers before it loses the capacity to influence decisions (Li et al 2010). Therefore, the timeliness of the submission of these reports is considered a very important aspect since it helps to provide more useful and updated information for decision-makers (Gunarsih 2011;Beest et al 2009). In addition, the conceptual framework for financial reporting acknowledged the issuing date of annual financial reports or the timeliness as one of the four features of useful information (Puasa et al 2014).…”

“…Nelson and Shukeri (2011) suggest that effective corporate governance factors will enhance the observing and control of managers and consequently cut instances of misreporting and delays in the annual reporting processes. Gunarsih (2011) suggests that good corporate governance is beneficial in controlling managers' behaviour, since corporate governance factors are an essential vital lead to confirm that the managers give their best performance in the interest parties. High standards of corporate governance mechanisms leads to ensuring that timely, appropriate, and truthful disclosures are made on all material and financial and non-financial information about the companies, including performance, the financial and non-financial situation and ownership structure (Gunarsih 2011).…”

“…Gunarsih (2011) suggests that good corporate governance is beneficial in controlling managers' behaviour, since corporate governance factors are an essential vital lead to confirm that the managers give their best performance in the interest parties. High standards of corporate governance mechanisms leads to ensuring that timely, appropriate, and truthful disclosures are made on all material and financial and non-financial information about the companies, including performance, the financial and non-financial situation and ownership structure (Gunarsih 2011). Furthermore, corporate governance has come into the picture as an implementation tool in confirming the quality of financial reports through supervision; additionally, monitoring the annual reporting process, which includes ensuring the timely submission of financial statements (Puasa et al 2014).…”