The Effect of Company Size, Liquidity, Profitability, Solvability, And Audit Firm Size on Audit Delay

Abstract

Audit delay is the lag in completing an audit report by the auditor. Audit delay causes financial statements to be inhibited for publication. This causes the users of financial statements to wait longer to be able to use financial statements as a tool in decision making. The purpose of this research is to empirically examine the effect of company size, liquidity, profitability, solvability, and audit firm size towards audit delay on property and real estate companies that listed on Indonesia Stock Exchange (IDX) in 2014-2018. This research is a quantitative study that tests the hypothesis, whether there is the influence of independent variables on the dependent variable. This study uses the ordinary least square method Statistical test used is the coefficient of determination test, partial t test and simultaneous f test. The selection of research samples using purposive sampling method. The sample of this research consists of 46 companies with 5 years of research so total of the research objects amounting 230 data. The data analysis method used in this research is panel data regression analysis using E-views version 10. Based on the results of partial test, profitability and audit firm size have significant effect on audit delay. Company size, liquidity, and solvency do not have a significant effect on audit delay. Simultaneous test result showed that company size, liquidity, profitability, solvability, and audit firm size simultaneously affect audit delay. The results of this study indicate that if the auditor wants to minimize audit delay, they must pay more attention to clients' profitability and consider the size of the company, the size of the audit's scope of work

Profitability determinants of the natural stone industry: Evidence from Spain and Italy

“…Currently, researchers disagree on the definition of company size. Some studies define it in terms of total assets, total operating income or number of employees [ 68 , 78 , 91 ].…”

“…In contrast, authors such as Asche et al (2018), Evans (1987), and Becker-Blease et al (2010) [ 28 , 67 , 78 ] claim that company size, defined as the level of assets, has a negative relationship with profitability. Other research finds that size has no impact on company performance [ 29 , 68 ]. According to this research, size is defined as the contingent of assets controlled by the company, and its relationship with profitability is expected to be positive, as stated in Hypothesis 1.…”

“…Company size has been shown to be positively related to profitability in studies such as those conducted by Asimakopoulos et al ( 2009 2010) [8,16,67] conclude that the influence is negative. However, other works argue that there is no relationship between the two variables [29,68].…”

“…Kouser et al (2012), Koralun-Bereźnicka & Ciołek (2018), and Becker-Blease et al (2010) [ 8 , 16 , 67 ] conclude that the influence is negative. However, other works argue that there is no relationship between the two variables [ 29 , 68 ].…”

“…Currently, researchers disagree on the definition of company size. Some studies define it in terms of total assets, total operating income or number of employees [68,78,91]. [28,67,78] claim that company size, defined as the level of assets, has a negative relationship with profitability.…”