Financial Reporting Timeliness

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.

There was vast research on the effectiveness of audit committees as part of the mechanisms in safeguarding shareholders’ interest and also ensuring effective financial reporting by companies. However, studies on the efficacy of audit committees as governance tools in a niche area relating to social enterprises namely cooperative societies in Malaysia is still scarce. Hence, this study intends to investigate the association between audit committee attributes namely audit committee expertise and experience, audit committee meeting frequency and audit committee size to the timeliness reporting compliance among Malaysian cooperative societies. Using qualitative research methods, 158 usable questionnaires from 59 cooperative societies were successfully gathered and analysed using SmartPLS 3 Version 3.2.8. The results obtained provided support to the notion that there is a significant positive relationship between the frequency of meetings on the timeliness reporting compliance and a significant positive relationship between audit committee size on the timeliness reporting compliance. However, the notion expecting a significant positive relationship between the expertise of the audit committee on the timeliness reporting compliance proved to be insignificant. Conclusively, the study provides theoretical and practical support to both literature and practitioners on the importance of having optimum audit committee size and high frequency of meeting in ensuring the timeliness compliance of financial reporting of cooperative societies.

The purpose of the current study is to investigate the influence of corporate and foreign ownership structures on the timeliness of financial reporting. The sample of the study consists of 2,204 observations obtained from 208 companies trading in Borsa Istanbul between 2008 and 2019. Multiple regression analysis was conducted, and the relationship between ownership structure and financial reporting timelinesses was investigated. The findings indicate that corporate and foreign ownership are significantly and negatively associated with financial reporting timeliness. Robustness analysis was carried out using the two-stage GMM method, and it was determined that there was no endogeneity problem. The results provide valuable information for financial reporting users, such as investors, companies, regulators, policymakers, and auditors, and will aid them in their decision-making processes as it reduces information asymmetry and contributes to the improvement of the financial reporting quality.

A board of directors is a group of people elected or appointed by shareholders to oversee a company’s operations. The success and long-term survival of the company depend on board decisions, which affect shareholders, employees, customers and all other stakeholders. Being a well-performing company in a highly complex and competitive environment is a huge challenge. To achieve this, the board needs to take into account the global environment, political and economic conditions in different countries, industry competitiveness, market situation, financial and legal aspects, latest technologies and innovations. Therefore, boards of directors need to become more diverse in terms of age, ethnicity and gender as well as tenure, experience, educational background and socioeconomic status. Board diversity refers to the heterogeneous composition of a board in terms of gender, age, race, education, experience, nationality, lifestyle, culture, religion and many other aspects that make each individual unique. Many empirical studies have found evidence that more diverse boards are more effective at making decisions and overseeing company performance. The aim of this study is to investigate the effect of board diversity on export performance. To do so, panel data analysis was used with 1337 observations obtained from non-financial companies traded in BIST (Borsa Istanbul) between 2010-2019; statistically examining the relationship between board diversity and export performance. For the purpose of this study, one dependent variable, three independent variables and eight control variables were used. Gender, race and age were used as independent variables, with export performance being the dependent variable. According to the analysis results, gender diversity of the board of directors had a statistically significant and negative effect on export performance; racial diversity of the board of directors had a statistically significant and positive effect on export performance. Additionally, age diversity of the board of directors had a statistically insignificant effect on export performance. This study contributes to existing literature by providing evidence for how board diversity affects export performance- an important indicator for developing countries’ success.

Every organization has a specific power structure that determines how decisions are made and who has the final say. This power structure is often referred to as the “ownership structure” and can have a major impact on the financial reporting process. A firm is managed by its shareholders, but the chairman and members of the board are responsible for the firm’s long-term and sustainable performance. The day-to-day operations of the company are usually carried out by the chief executive officer (CEO) and its members, and the executive board is under the responsibility of carrying out the decisions of the members of the board of directors and safely operating the activities in accordance with the goals and strategies they have set. High ownership of top management (the chairman, board members, and CEO) indicates that top managers are invested in the company and their interests are integrated with the company’s success. It also makes it easier for top managers to set their priorities and goals for the benefit of the company and enables them to focus on the company’s success. On the other hand, it can lead to a situation where the top management has disproportionate control over the company. It may result in decisions being made that are not in the best interests of all shareholders, but only in the interests of those who hold the most shares. Also, a high average ownership rate can make it difficult for new investors to acquire a significant stake in the company, which can limit its growth potential. The aim of this study is to investigate the effect of top management’s ownership structure on financial reporting timeliness. In this context, panel data analysis method was used by using 1575 observations obtained from non-financial companies traded in BIST (Borsa Istanbul) between 2012-2019. For the purpose of the study, two dependent variables, three independent variables and thirteen control variables were used. Ownership of chairman of the board, average ownership of board members and CEO ownership were used as independent variables, and audit report delay and sectoral audit report delay were used as dependent variables. According to the results of the analysis, the average ownership of the board of directors is significantly and negatively associated with financial reporting timeliness; Ownership of chairman of the board is significantly and positively associated with financial reporting timeliness timeliness. Finally, CEO ownership has a statistically insignificant effect on financial reporting timeliness. Our research adds to the literature, which has few studies in this area, by providing important empirical evidence.

Financial reporting timeliness is an important indicator of financial reporting quality. Delays in financial reporting can lead to higher risks, missed opportunities and more information asymmetry for decision makers, and can reduce reliance on financial reports in the long run. In order to prevent all these problems and to deliver financial information to those who request it as soon as possible, it is necessary to investigate the determinants of financial reporting timeliness. Ownership structure refers to how much control and influence shareholders have over a business’s operations and decisions. For the ownership structure to affect the timeliness of financial reporting, shareholders must be involved in decisionmaking. When shareholders are actively involved in making decisions about the company’s finances, they may be more likely to press for timely reports to stay informed about their investments. On the other hand, the lack of involvement of shareholders or the lack of sufficient authority to make decisions on their own can lead to delays in the preparation of financial reports due to a lack of management oversight or accountability. In this context, panel data analysis method was used by using 1602 observations obtained from non-financial companies traded in BIST (Borsa Istanbul) between 2012-2019. For the purpose of the study, two dependent variables, two independent variables and thirteen control variables were used. Institutional ownership and person ownership were used as independent variables, and audit report delay and sectoral audit report delay were used as dependent variables. According to the analysis results, Institutional ownership of companies is significantly and negatively associated with financial reporting timeliness; person ownership of companies significantly and positively associated with financial reporting timeliness. This study provides investors, managers and policy makers with important empirical findings on the causes of delays in financial reports.

Purpose-A key factor in ensuring that stakeholders can make well-informed decisions based on accurate and up-to-date information is financial reporting timeliness. This involves the timely release of financial statements, which are essential for providing investors, creditors, and other stakeholders with an overview of a company's financial status. Timely financial reporting allows stakeholders to react quickly to changes in a company's financial situation and make informed investment decisions. It also helps to build trust and confidence in a company's management and financial reporting processes, ultimately leading to greater transparency and accountability. This study aims to provide a scope review of current literature on financial reporting timeliness by analyzing the number of publications on this topic in Web of Science. Methodology-A systematic search of academic databases and search engines was conducted using keywords such as "financial reporting timeliness," "audit report lag" and "audit report delay". Findings-We found that there are more than 150 publications on the topicality of financial reporting on the Web of Science alone from 2012-2023. Over the past few years, there has been a steady and consistent increase in the number of publications dedicated to exploring the topic of financial reporting timeliness, specifically focusing on the audit report lag. Conclusion-The review highlights key themes, including factors contributing to audit report delays, the impact of audit report delays on financial reporting timeliness, and potential solutions for improving audit report timeliness. The findings reveal that audit report delays can have significant consequences for financial reporting timeliness, and consequently, for stakeholders' decision-making processes. This scope review underscores the importance of addressing audit report delays to maintain timely financial reporting and proposes future research directions for further exploration.

Purpose: This study investigates the determinants of audit committee (AC) formation in a semi-mandatory setting of a European economy, in which ownership and control are predominantly in the hands of families and business groups, and the voluntary practice of forming an AC has not been widely accepted. Methodology: This research uses a sample of Polish nonfinancial firms listed on the Warsaw Stock Exchange (WSE) in 2008–2015. The study implemented logistic regression to test the role of the supervisory board (SB) and companies’ compositional characteristics in AC creation. Findings: Primary analysis provided evidence of an inverted association between commonly accepted determinants of AC formation – such as the number of independent members on the supervisory board (SB) – and accounting and finance expertise of the SB members. The study also revealed that companies with foreign ownership are more likely to have an AC. Originality: This study indicates an important relationship betwe...

Audit report delay is an important measure around the world and has been a long-standing area of interest for managers, investors, auditors, regulators, and academics. Timely audit reporting, which is one of the most important indicators of financial reporting quality, is quite likely to be related to the board. This study investigates the influence of board size, board independence, board diversity and CEO duality, on the audit report delay. As such, a regression analysis is conducted using 1932 observations obtained from non-financial companies traded on the BIST between 2009-2019 and the relationship of the board features with the audit report delay is tested. The findings of the study show that board size, CEO duality and board race diversity are negative and significantly associated with audit report delay. Larger boards are likely to reduce latency in audit reports as they can make better quality and more effective decisions. The same person in the CEO and chairman role can weaken the monitoring and audit quality, resulting in poor corporate governance practices and prolonging audit time. Race differences in the board can contribute to enhancing the effectiveness and monitoring activities within the company, thereby shortening the delay of the audit reports. This study serves as a guide to policymakers and regulators in formulating policies and strategies with respect to audit report delay and board characteristics.

Objective: Information is the most important source of decision-making, and its important role in the capital market makes it the most important asset. The auditing profession provides useful data for potential investors to have informed decisions by providing information for companies in the form of financial statements. However, the speed of reaction and the right decision by investors depend on the qualitative characteristics of financial statements; and the most important one is timely access to information. According to the theoretical foundation of financial reporting, timely access to information is one of the limitations of financial reporting that overshadows the achievements of qualitative reporting characteristics. Timely annual financial reporting, as an information advantage, remains at the center of investors' attention. On the other hand, the various characteristics of the audit committee chair can overshadow the effectiveness of information disclosure outside and play an effective role in timely financial reporting. The purpose of this study is to investigate the impacts of financial expertise and empirical features of audit committee chairman on timely financial reporting.
Method. The statistical population of the study was all the companies listed on the Tehran Stock Exchange during a 6-year period from 2013 to 2018. To test the research hypotheses, we used the OLS model with robust standard errors. Also, to control the confounding effects of industries and different years, we added dummy variables to the regression models. We could examine the confounding influences of industries and years, and the model fits correctly.
Results. The results show that there is no significant relationship between financial expertise and empirical features of the audit committee chairman with a delay in the audit report. Also, the additional results obtained from the robustness test strongly support the results of the principal research model. Therefore, there is not enough evidence to support the research hypotheses.
Conclusion. The results of the data analysis indicate that the financial expertise and the tenure of the Audit Committee chairman do not help to improve the timeliness of financial reporting. The results also show that the measures of corporate governance concerning the audit committee do not display the expected performance in the companies listed on the Tehran Stock Exchange. The emergence of audit committees as well as the internal audit profession, which complements audit committees, can be a reason for this issue. Lack of knowledge and the necessary basic training, lack of clear instructions, the incomplete formation of audit committees and internal audit unit, and lack of full support of the company's senior management of the internal audit unit can be the reasons for the lack of impact. Over time, we expect more experiences and future reforms of audit committees to become more efficient and effective and to play a prominent role in improving corporate governance indicators.