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Abstract
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Theoretical Background and Hypothesis
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Sociology
Gender Studies

Audit Committee and Timely Reporting: Evidence From Turkey

Profile image of Abdullah Kürşat MerterAbdullah Kürşat Merter

2024, Audit Committee and Timely Reporting: Evidence From Turkey

https://doi.org/10.1177/21582440241239516
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Abstract

This paper seeks to examine whether the characteristics of the audit committee impact the timely reporting represented by audit report lag (ARL), firm-based abnormal audit report lag (FAARL), and industry-based audit reports lag (IAARL). The sample of the study includes mostly hand-collected 2,284 firm-year observations obtained from Turkey's listed non-financial companies. Main regression results show that audit committee gender diversity, meeting frequency, and independence are negatively associated with timely reporting. Furthermore, additional analysis indicates the negative association between timely reporting and the audit committee effectiveness indexes created by the coexistence of the audit committee. Also, an interaction effect between audit committee independence and gender diversity concerning the timeliness of financial reporting has been documented. The use of fixed effects estimators and two-step system GMM estimator also supported the main results. This paper aims to provide concrete contribution to the literature by examining timely reporting in an emerging market like Turkey. The results suggest that regulatory bodies and companies should review the audit committee structure to better timely reporting and reduce firm and industry-based abnormal delays.

Key takeaways
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  1. Audit committee characteristics significantly influence financial reporting timeliness in Turkey, particularly independence and gender diversity.
  2. The study analyzed 2,284 firm-year observations from non-financial Turkish companies between 2009-2019.
  3. Increased audit committee independence, meeting frequency, and gender diversity correlate with reduced audit report lag (ARL).
  4. No significant relationship was found between financial expertise or size of the audit committee and timely reporting.
  5. Regulatory bodies should improve guidelines to enhance audit committee effectiveness and promote gender diversity in Turkey.

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FAQs

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What key factors influence financial reporting timeliness in Turkey?add

The study finds that audit committee independence, meeting frequency, and gender diversity negatively correlate with audit report lag, emphasizing these characteristics' role in timeliness.

How does gender diversity in audit committees impact financial reporting?add

The research reveals that female representation in Turkish audit committees is associated with reduced audit report lag, suggesting diversity enhances reporting timeliness.

What methodologies were used to measure financial reporting timeliness?add

The analysis employs three proxies: audit report lag, firm-based abnormal audit report lag, and industry-based abnormal audit report lag to assess reporting timeliness across firms.

What was the sample size and timeframe of the study?add

The study analyzed 2,284 firm-year observations from non-financial companies listed on Borsa Istanbul from 2009 to 2019.

How does audit committee financial expertise affect reporting timeliness?add

The findings indicate no significant relationship between audit committee financial expertise and timely reporting, despite prior literature citing its importance.

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