IDEAS home Printed from https://ideas.repec.org/a/taf/acctbr/v30y1999i1p17-28.html
   My bibliography  Save this article

Determinants of audit report lag: further evidence from Hong Kong

Author

Listed:
  • Bikki Jaggi
  • Judy Tsui

Abstract

This study examines whether the audit report lag (ARL) of Hong Kong companies is associated with auditor business risk and audit firm technology. The study is based on a sample of 393 Hong Kong companies for the 1991–1993 period. Financial condition and family ownership/control of a company are used as proxies for auditor business risk, and the structured/unstructured audit approach is used as a proxy for audit firm technology. Other variables, such as the number of subsidiaries, nature of client's business, company size, unexpected positive earnings news and nature of audit opinion, are included as control variables. Regression results show that there is a positive association between the audit report lag and the financial risk index for Hong Kong companies, suggesting that companies with a weak financial condition are associated with longer audit delays. The results also show that companies audited by audit firms using the structured audit approach have longer audit delays. The findings on the association between ARL and the company's family ownership and control suggest that family-owned/controlled companies may have shorter audit delays, though the results are statistically not significant. Larger companies appear to provide motivation for shorter audit delays.

Suggested Citation

  • Bikki Jaggi & Judy Tsui, 1999. "Determinants of audit report lag: further evidence from Hong Kong," Accounting and Business Research, Taylor & Francis Journals, vol. 30(1), pages 17-28.
    • Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:17-28
    DOI: 10.1080/00014788.1999.9728921
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00014788.1999.9728921
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00014788.1999.9728921?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. Dirsmith, Mark W. & Haskins, Mark E., 1991. "Inherent risk assessment and audit firm technology: A contrast in world theories," Accounting, Organizations and Society, Elsevier, vol. 16(1), pages 61-90.
    3. Ashton, Rh & Willingham, Jj & Elliott, Rk, 1987. "An Empirical-Analysis Of Audit Delay," Journal of Accounting Research, Wiley Blackwell, vol. 25(2), pages 275-292.
    4. Robert H. Ashton & Paul R. Graul & James D. Newton, 1989. "Audit delay and the timeliness of corporate reporting," Contemporary Accounting Research, John Wiley & Sons, vol. 5(2), pages 657-673, March.
    5. Zmijewski, Me, 1984. "Methodological Issues Related To The Estimation Of Financial Distress Prediction Models," Journal of Accounting Research, Wiley Blackwell, vol. 22, pages 59-82.
    6. Dopuch, Nicholas & Holthausen, Robert W. & Leftwich, Richard W., 1986. "Abnormal stock returns associated with media disclosures of `subject to' qualified audit opinions," Journal of Accounting and Economics, Elsevier, vol. 8(2), pages 93-117, June.
    7. Kinney, William Jr. & McDaniel, Linda S., 1989. "Characteristics of firms correcting previously reported quarterly earnings," Journal of Accounting and Economics, Elsevier, vol. 11(1), pages 71-93, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yan Luo & Steven E. Salterio, 2021. "Toward an Archival Measure of the Likelihood of Auditor‐Client Management Negotiation: An Exploration of the Audit Lag Measures Conjecture†," Accounting Perspectives, John Wiley & Sons, vol. 20(1), pages 109-143, March.
    2. Khadijah Adeola Idowu & Jamiu Olakunle Tijani, 2020. "Audit Reporting Lag and Regulatory Compliance in Listed Financial Services Firms in Nigeria: A Cross-Sectoral Evaluation," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(3), pages 163-173, September.
    3. Awatif Hodaed Alsheikh & Warda Hodaed Alsheikh, 2023. "Does Audit Committee Busyness Impact Audit Report Lag?," IJFS, MDPI, vol. 11(1), pages 1-16, March.
    4. Musa Inuwa Fodio & Victor Chiedu Oba & Abiodun Bamidele Olukoju & Ahmed Abubakar Zik-rullahi, 2015. "IFRS Adoption, Firm Traits and Audit Timeliness: Evidence from Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(3), pages 106-119, June.
    5. Abernathy, John L. & Beyer, Brooke & Masli, Adi & Stefaniak, Chad, 2014. "The association between characteristics of audit committee accounting experts, audit committee chairs, and financial reporting timeliness," Advances in accounting, Elsevier, vol. 30(2), pages 283-297.
    6. Ishaq Ahmed Mohammed & Ayoib Che-Ahmad & Mazrah Malek, 2018. "Shareholder’s involvement in the audit committee, audit quality and financial reporting lag in Nigeria," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(2), pages 355-374, April.
    7. Wan-Hussin, Wan Nordin & Bamahros, Hasan Mohammed, 2013. "Do investment in and the sourcing arrangement of the internal audit function affect audit delay?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 9(1), pages 19-32.
    8. Yuedong Li & Dong Zhang & Xingyu Wang, 2014. "The Influence Of Corporation Governance Structure On Internal Control Audit Report Lag: Evidence From China," Accounting & Taxation, The Institute for Business and Finance Research, vol. 6(2), pages 101-115.
    9. Bryan, David B. & Mason, Terry W., 2020. "Earnings volatility and audit report lag," Advances in accounting, Elsevier, vol. 51(C).
    10. Oradi, Javad, 2021. "CEO succession origin, audit report lag, and audit fees: Evidence from Iran," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 45(C).
    11. Wafa Al-Ghanem & Mohamed Hegazy, 2011. "An Empirical Analysis of Audit Delays and Timeliness of Corporate Financial Reporting in Kuwait," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 1(1), pages 73-90, June.
    12. Hyunmin Oh & Heungjoo Jeon, 2022. "Does Corporate Sustainable Management Reduce Audit Report Lag?," Sustainability, MDPI, vol. 14(13), pages 1-24, June.
    13. Susana Escaloni & Mercedes Mareque, 2021. "Audit Report Lag. Differential Analysis between Spanish SMEs and Non-SMEs," Sustainability, MDPI, vol. 13(22), pages 1-21, November.
    14. Hussein Ali Khasharmeh & Khaled Aljifri, 2010. "The Timeliness Of Annual Reports In Bahrain And The United Arab Emirates: An Empirical Comparative Study," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 4(1), pages 51-71.
    15. Kogilavani Apadore & Siti Subaryani Binti Zainol, 2014. "Determinants of Corporate Governance and Corporate Performance among Consumer Product Industry in Malaysia: A Theoretical Model," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 159-165, April.
    16. Eghosa Inneh & Isaiah Omotayo FAKUNLE & Romoke Rafiat BUSARI & Ibrahim Gbenga OLATUNJI, 2022. "Audit Characteristics and Financial Reporting Timeliness of Nigerian Listed Non-Financial Institution," Journal of Economics and Behavioral Studies, AMH International, vol. 14(2), pages 13-25.
    17. Ahnaf Alsmady, 2018. "The Effect of Board of Directors’ Characteristics and Ownership Type on the Timeliness of Financial Reports," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(6), pages 276-276, April.
    18. Souha Ben Gamra & Fadhila Hamza & Hela Borgi, 2022. "The Impact of IFRS Adoption and Corporate Governance Mechanisms on Audit Report Lag: Evidence from An Emerging Country," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 21(4), pages 604-630, December.
    19. Hua-Wei Huang & Mai Dao & Wen-Chi Sun, 2017. "The Timeliness of Financial Reporting and Fair Values: Evidence from U.S. Banks," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-30, March.
    20. Bishnu Prasad Bhattarai, 2021. "Determinants of Audit Report Lag of Commercial Banks in Nepal," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(10), pages 108-108, July.
    21. Beylem Çelik & Gökhan Özer & Abdullah Kürşat Merter, 2023. "The Effect of Ownership Structure on Financial Reporting Timeliness: An Implementation on Borsa Istanbul," SAGE Open, , vol. 13(4), pages 21582440231, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Habib, Ahsan & Bhuiyan, Md. Borhan Uddin, 2011. "Audit firm industry specialization and the audit report lag," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 20(1), pages 32-44.
    2. Kenneth B. Schwartz & Billy S. Soo, 1996. "The Association Between Auditor Changes and Reporting Lags," Contemporary Accounting Research, John Wiley & Sons, vol. 13(1), pages 353-370, March.
    3. Ghosh, Aloke(Al) & Tang, Charles Y., 2015. "Assessing financial reporting quality of family firms: The auditors׳ perspective," Journal of Accounting and Economics, Elsevier, vol. 60(1), pages 95-116.
    4. Stephen Owusu-Ansah, 2000. "Timeliness of corporate financial reporting in emerging capital markets: empirical evidence from the Zimbabwe Stock Exchange," Accounting and Business Research, Taylor & Francis Journals, vol. 30(3), pages 241-254.
    5. Wan-Hussin, Wan Nordin & Bamahros, Hasan Mohammed, 2013. "Do investment in and the sourcing arrangement of the internal audit function affect audit delay?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 9(1), pages 19-32.
    6. Hua-Wei Huang & Mai Dao & Wen-Chi Sun, 2017. "The Timeliness of Financial Reporting and Fair Values: Evidence from U.S. Banks," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-30, March.
    7. Souha Ben Gamra & Fadhila Hamza & Hela Borgi, 2022. "The Impact of IFRS Adoption and Corporate Governance Mechanisms on Audit Report Lag: Evidence from An Emerging Country," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 21(4), pages 604-630, December.
    8. Pei-Gi Shu & Tsung-Kang Chen & Wen-Jye Hung, 2015. "Audit duration quality and client credit risk," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 22(2), pages 137-162, June.
    9. Richardson, Grant & Taylor, Grantley & Lanis, Roman, 2015. "The impact of financial distress on corporate tax avoidance spanning the global financial crisis: Evidence from Australia," Economic Modelling, Elsevier, vol. 44(C), pages 44-53.
    10. Md. Borhan Uddin Bhuiyan & Solomon Opare & Zahir Ahmed, 2024. "Does Audit Committee Busyness Affect Financial Restatement? Evidence from Audit Committee Share Ownership," Australian Accounting Review, CPA Australia, vol. 34(1), pages 29-54, March.
    11. Meles, Antonio & Salerno, Dario & Sampagnaro, Gabriele & Verdoliva, Vincenzo & Zhang, Jianing, 2023. "The influence of green innovation on default risk: Evidence from Europe," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 692-710.
    12. Elizabeth Demers & Philip Joos, 2007. "IPO Failure Risk," Journal of Accounting Research, Wiley Blackwell, vol. 45(2), pages 333-371, May.
    13. Miglani, Seema & Ahmed, Kamran & Henry, Darren, 2015. "Voluntary corporate governance structure and financial distress: Evidence from Australia," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(1), pages 18-30.
    14. Sheng‐Fu Wu & Chung‐Yi Fang & Wei Chen, 2020. "Corporate governance and stock price crash risk: Evidence from Taiwan," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(7), pages 1312-1326, October.
    15. Dafydd Mali & Hyoung‐joo Lim, 2021. "Do Relatively More Efficient Firms Demand Additional Audit Effort (Hours)?," Australian Accounting Review, CPA Australia, vol. 31(2), pages 108-127, June.
    16. Ayad Ahmed Mohammed Al-Qublani & Hasnah Kamardin & Rohami Shafie, 2020. "Audit Committee Chair Attributes and Audit Report Lag in an Emerging Market," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(4), pages 475-492, July.
    17. Bryan, David B. & Mason, Terry W., 2020. "Earnings volatility and audit report lag," Advances in accounting, Elsevier, vol. 51(C).
    18. Sharad Asthana & Rachana Kalelkar, 2011. "The Market For Audit Services And S&P 500 Index Clients," Working Papers 0022, College of Business, University of Texas at San Antonio.
    19. Chou, Hsin-I & Li, Hui & Yin, Xiangkang, 2010. "The effects of financial distress and capital structure on the work effort of outside directors," Journal of Empirical Finance, Elsevier, vol. 17(3), pages 300-312, June.
    20. Sattar A. Mansi & William F. Maxwell & Darius P. Miller, 2004. "Does Auditor Quality and Tenure Matter to Investors? Evidence from the Bond Market," Journal of Accounting Research, Wiley Blackwell, vol. 42(4), pages 755-793, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:17-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RABR20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.