Audit committee effectiveness and timeliness of reporting: Indonesian evidence

Purpose – The purpose of this paper is to examine the association between audit committee effectiveness and timeliness of reporting. Specifically, the paper investigates whether there is any relationship between effectiveness of an audit committee and submission of audited financial statements to th...

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Main Authors:	Ika, Siti Rochmah, Mohd Ghazali, Nazli Anum
Format:	Article
Language:	English
Published:	Emerald 2012
Subjects:	H Social Sciences (General)
Online Access:	http://irep.iium.edu.my/11254/ http://irep.iium.edu.my/11254/ http://irep.iium.edu.my/11254/ http://irep.iium.edu.my/11254/1/Audit_committee_effectiveness_and_timeless_of_reporting-_Indonesian_evidence.pdf

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spelling	iium-112542012-11-08T06:22:23Z http://irep.iium.edu.my/11254/ Audit committee effectiveness and timeliness of reporting: Indonesian evidence Ika, Siti Rochmah Mohd Ghazali, Nazli Anum H Social Sciences (General) Purpose – The purpose of this paper is to examine the association between audit committee effectiveness and timeliness of reporting. Specifically, the paper investigates whether there is any relationship between effectiveness of an audit committee and submission of audited financial statements to the Indonesian Stock Exchange (IDX). Design/methodology/approach – Audit committee effectiveness is measured by an index based on the framework developed by DeZoort et al. Timeliness of reporting is defined as the number of days that elapses between a company's financial year-end and the day on which its audited financial statement is received by the IDX. The sample comprises 211 non-financial Indonesian listed companies. Multivariate regression analysis was performed to analyse the relationship between audit committee effectiveness and timeliness of reporting. Findings – The findings show that timeliness of reporting is associated with audit committee effectiveness. This result suggests that audit committee effectiveness is likely to reduce the financial reporting lead time, i.e. the time taken by companies to publicly release audited financial statements to the stock exchange. Research limitations/implications – The audit committee effectiveness index employed in this study was based on DeZoort et al.'s framework. There could be other aspects of audit committee effectiveness such as the organizational context or multiple-directorship which had not been addressed in the present study. Thus, future research may consider and examine these other aspects in developing a more comprehensive index. Practical implications – The findings suggest that audit committee effectiveness is a significant factor ensuring timely submission of audited financial statements. Thus, companies perhaps can re-look into how to further improve audit committee effectiveness in order to enhance timeliness of financial reporting. Originality/value – Unlike the majority of prior studies which investigated the association between the presence/absence of audit committee and timeliness of reporting, this study is one of few which examined the relationship between effectiveness of audit committee and timeliness of reporting in an emerging country. Emerald 2012 Article PeerReviewed application/pdf en http://irep.iium.edu.my/11254/1/Audit_committee_effectiveness_and_timeless_of_reporting-_Indonesian_evidence.pdf Ika, Siti Rochmah and Mohd Ghazali, Nazli Anum (2012) Audit committee effectiveness and timeliness of reporting: Indonesian evidence. Managerial Auditing Journal, 27 (4). pp. 403-424. ISSN 0268-6902 http://www.emeraldinsight.com/journals.htm?articleid=17026572 10.1108/02686901211217996
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	H Social Sciences (General)
spellingShingle	H Social Sciences (General) Ika, Siti Rochmah Mohd Ghazali, Nazli Anum Audit committee effectiveness and timeliness of reporting: Indonesian evidence
description	Purpose – The purpose of this paper is to examine the association between audit committee effectiveness and timeliness of reporting. Specifically, the paper investigates whether there is any relationship between effectiveness of an audit committee and submission of audited financial statements to the Indonesian Stock Exchange (IDX). Design/methodology/approach – Audit committee effectiveness is measured by an index based on the framework developed by DeZoort et al. Timeliness of reporting is defined as the number of days that elapses between a company's financial year-end and the day on which its audited financial statement is received by the IDX. The sample comprises 211 non-financial Indonesian listed companies. Multivariate regression analysis was performed to analyse the relationship between audit committee effectiveness and timeliness of reporting. Findings – The findings show that timeliness of reporting is associated with audit committee effectiveness. This result suggests that audit committee effectiveness is likely to reduce the financial reporting lead time, i.e. the time taken by companies to publicly release audited financial statements to the stock exchange. Research limitations/implications – The audit committee effectiveness index employed in this study was based on DeZoort et al.'s framework. There could be other aspects of audit committee effectiveness such as the organizational context or multiple-directorship which had not been addressed in the present study. Thus, future research may consider and examine these other aspects in developing a more comprehensive index. Practical implications – The findings suggest that audit committee effectiveness is a significant factor ensuring timely submission of audited financial statements. Thus, companies perhaps can re-look into how to further improve audit committee effectiveness in order to enhance timeliness of financial reporting. Originality/value – Unlike the majority of prior studies which investigated the association between the presence/absence of audit committee and timeliness of reporting, this study is one of few which examined the relationship between effectiveness of audit committee and timeliness of reporting in an emerging country.
format	Article
author	Ika, Siti Rochmah Mohd Ghazali, Nazli Anum
author_facet	Ika, Siti Rochmah Mohd Ghazali, Nazli Anum
author_sort	Ika, Siti Rochmah
title	Audit committee effectiveness and timeliness of reporting: Indonesian evidence
title_short	Audit committee effectiveness and timeliness of reporting: Indonesian evidence
title_full	Audit committee effectiveness and timeliness of reporting: Indonesian evidence
title_fullStr	Audit committee effectiveness and timeliness of reporting: Indonesian evidence
title_full_unstemmed	Audit committee effectiveness and timeliness of reporting: Indonesian evidence
title_sort	audit committee effectiveness and timeliness of reporting: indonesian evidence
publisher	Emerald
publishDate	2012
url	http://irep.iium.edu.my/11254/ http://irep.iium.edu.my/11254/ http://irep.iium.edu.my/11254/ http://irep.iium.edu.my/11254/1/Audit_committee_effectiveness_and_timeless_of_reporting-_Indonesian_evidence.pdf
first_indexed	2023-09-18T20:20:35Z
last_indexed	2023-09-18T20:20:35Z
_version_	1777408079859548160

Audit committee effectiveness and timeliness of reporting: Indonesian evidence

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