The Effect of Audit Tenure and Size of Public Accountant Firm on Audit Report Lag with Auditor Industry Specialization as Moderating Variable

Abstract

Relevance is one of the qualitative qualities of financial statements. If financial statements are submitted on time, they can be considered relevant. Audit report lag is closely related to timely report submission. It can increase the efficiency and quality of financial reports and enable users to rely on financial statement information when making judgments. The amount of enterprises still filing financial reports late demonstrates that punctuality remains a serious hurdle for Indonesian businesses. In contrast to earlier research, this study examines all manufacturing businesses listed on the Indonesia Stock Exchange between 2015 and 2019 using Multiple Linear Regression Analysis and Moderated Regression Analysis. The results of the study indicate that tenure audit has a significant impact on audit report lag, that the size of a public accounting firm has no significant impact on audit report lag, and that auditor industry specialization significantly moderates the impact of tenure audit and the scope of general accounting firm on audit report lag.

The Role of Public Accountant Company in Pressing Audit Report Delays for Go Public Companies in Indonesia Through Panel Analysis

“…Additionally, market pressure compels corporations to release financial reports on schedule. The findings of this study do not support the findings of (Shofiyah & Wilujeng Suryani, 2020), (Sudradjat et al, 2022), (Diana & Hidayat, 2022) which contend that the size of the company does not always significantly affect the delay in the release of audit reports. The findings of this study, however, are consistent with those of (Satyawan & ahmmi, 2020), (Machmuddah et al, 2020), who found that the magnitude of the company size always indicate how short an organization's audit report lag will be.…”

“…It further explains that an auditor who has a long assignment with a client company will encourage the creation of business knowledge so as to enable the auditor to design an effective audit program and high quality audited financial reports. (Diana & Hidayat, 2022) stated that when the auditor and client establish a cooperative relationship for a relatively long period of time, it will provide benefits for both the client and the auditor. The length of the audit engagement period with the client can assist the auditor in obtaining due diligence, accuracy and audit expertise.…”

“…The measurement of the company's performance and economic success and the quality of its resources are communicated by the company to its users through financial reports (Shofiyah & Wilujeng Suryani, 2020). Reliability and timeliness of financial statements are two very important and useful criteria where users of financial statements (Diana & Hidayat, 2022), in order to be able to focus more on reading the company's performance to make it easier for readers to get information related to the required objectives. Audited financial statements can be considered a reliable and readily available source of information, as they are provided to their users along with opinions from auditors or other independent professionals.…”

“…Additionally, KAP's reputation can increase the association between profitability and audit delay, but it has no discernible impact on the relationship between solvency and audit delay. Then, (Ibrahim Abd-El Rehim Ibrahim, 2022); (Diana & Hidayat, 2022) tested financial distress toward the audit report lag. In their research said that financial distress is a stage of decreasing the company's financial condition and if this is allowed to drag on it will cause the company to go bankrupt.…”

“…Another study looks at the impact of profitability, firm size, audit tenure and audit committee on audit delay, which is tempered by KAP reputation, and finds that these factors all negatively affect audit delay as (Mufidah & Laily, 2019); (Prasetyo et al, 2021); (Diana & Hidayat, 2022). Profitability, firm size, and the audit committee will all contribute to a shorter audit delay period.…”