The Audit Committee’s Forecasted Impact on the Timeliness of Financial Statements in the Current Unpredictable Business Environment – Evidence in Vietnamese Listed Joint Stock Companies

Abstract

This article aims to analyze the influence of the Audit Committee (AC) in the organizational structure of the joint stock company on the timeliness of the Financial Statements (FS). AC is a new part of the organizational structure of the joint-stock company in Vietnam, which had just been legislated and took effect in 2021. AC aims to inspect and supervise the company's activities to enhance the truthfulness, reasonableness, and timeliness of Financial Statements (FS). Under the effect of the Covid-19 epidemic and the ongoing trade war, the global business environment has become unpredictable in recent years as well as in the coming years. Since then, it has significantly impacted the production and business situation, and the time of publishing FS of companies. A quantitative study method is conducted by collecting data from the year 2017 to 2021 from all listed companies that have established AC. The authors analyzed the impact of Audit Committees on the timing of the FS publication. The results showed that AC with a compact personnel structure has played an active role in improving the timeliness of FS. When the company has an Audit Committee, the probability that FS information is timely published increases by 14.34%. This finding encourages joint-stock companies to examine the provisions of Enterprise Law 2020 when selecting a management structure to enhance the timeliness of financial statement information in the present unpredictable business climate.