The Effect of Bankruptcy Possibility on Audit Delay and Timeliness (Empirical Study on Manufacturing Companies Listed in Indonesian Stock Exchange in the Period of 2012-2016)

Meinarsih, Triana; Yusuf, Abdul; Hamzah, Muhammad Zilal

doi:10.36766/ijag.v2i2.29

Cited by 2 publications

(3 citation statements)

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“…Merdekawati and Arsjah (2011) showed that debt ratio is one of the factors causing companies to be late in submitting their financial reports. Research by Meinarsih et al (2018) on public companies in Indonesia engaged in the manufacturing sector showed that increasing the likelihood of companies going bankrupt will cause audit delays and delays in the publication of financial statements. Nova et al (2019) essentially showed the same result, the greater probability of company failure, the slower submission of financial reports.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

The Way Financial Distress Affects Financial Reporting Delay

Nurquran

Ardianto

2023

J. Theor. Appl. Manage.

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Objective: Previous studies identified a significant effect of financial distress experienced by a company on the delay in submitting its audited financial report. However, no analysis to identify whether the effect is direct or indirect by decomposing the total effect calculated. This study conducted further analysis aiming to reveal the mechanism of the way financial distress affects financial reporting delay, whether the effect is entirely direct or there is a portion of indirect effect, by decomposing the total effect using the quality of financial report as a mediating factor. Design/Methods/Approach: Public companies listed at Indonesian Stock Exchange (IDXI), whichever delay in submitting audited financial reports were targeted population, the purposive sampling method was implemented to collect financial reports within the 2014-2020 period. Logistic regression, linear regression, and a technique to decompose the effect into four components under the mediation model are analysis methods. In addition, the quality of the financial report measured by the Beneish Score was used as a mediator variable. Findings: This study found that the more severe the financial distress experienced by a company, the more likely it will delay submitting its audited financial report. Although there is an indication that financial distress affects the quality of the financial report, however no significant evidence that the quality of the financial report mediates some of the effects of financial distress on financial reporting delay. In other words, the effect of financial distress is direct. Originality/Value: This study delivered new insight by including financial reporting quality as a potential mediating variable in the relationship between financial distress and financial reporting delay. The existence of mediating variable allowed us to decompose the total effect of financial distress on the financial reporting delay and identify whether financial distress's effect on financial reporting delay is direct or indirect. The identification of direct and indirect effects will reveal the mechanism of how financial distress effects affect financial reporting delay. The researchers expected to add new insight, where the use of financial reporting quality as a mediating variable was expected to reveal the mechanism of the relationship between financial distress and financial reporting delay. This study evaluates the relationship between financial distress experienced by companies, financial reporting quality, and financial reporting delay. Practical/Policy implication: The findings of this study suggest that investors have to be more careful in investment decision-making on public companies that delay submitting their audited financial reports, and regulators have to strengthen protection for investors.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

The Way Financial Distress Affects Financial Reporting Delay

Nurquran

Ardianto

2023

J. Theor. Appl. Manage.

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“…Pada penelitian (Nugroho et al, 2021) menyatakan bankruptcy prediction mempengaruhi audit delay secara signifikan. Didukung (Meinarsih et al, 2018) pada penelitian yang dilakukan. (Sekar Prabandari, 2021) dalam penelitiannya mengungkapkan tidak terdapat pengaruh bankruptcy prediction terhadap audit delay.…”

Section: Bankruptcy Prediction Terhadap Audit Delayunclassified

“…Hipotesis awal juga menyatakan bahwa bankruptcy prediction mempengaruhi audit delay. Ini sesuai dengan penelitian(Meinarsih et al, 2018) berpendapat ketika sebuah perusahaan mengalami kemungkinan kebangkrutan yang lebih tinggi, hal itu cenderung mempengaruhi auditor untuk menyelesaikan auditnya lebih cepat karena auditor membutuhkan data tambahan yang diperlukan untuk menghasilkan opini yang mengikuti kondisi perusahaan. Pada penelitian yang dilakukan (Sekar Prabandari, 2021) bankruptcy prediction tidak berpengaruh terhadap audit delay.…”

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Pengaruh Reputasi Auditor, Audit Complexity, Financial Expertise CEO, dan Bankruptcy Prediction terhadap Audit Delay

Silitonga,

Siagian

2022

JAE

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Ketepatan waktu dalam menyajikan laporan keuangan merupakan hal penting bagi perusahaan dalam peningkatan kualitasnya. Semakin lama waktu yang diperlukan dalam pengauditan dan penyajian laporan keuangan maka perusahaan dianggap tidak mampu mengelolanya dengan baik. Perusahaan harus melaporkan laporan keuangan yang telah diaudit 120 hari setelah tahun buku berakhir sesuai dengan peraturan yang telah ditetapkan. Penelitian ini bertujuan untuk menguji dan mengetahui pengaruh reputasi auditor, audit complexity, financial expertise CEO, dan bankruptcy prediction terhadap audit delay secara parsial dan simultan. Penelitian ini menggunakan jenis data sekunder bersifat kuantitatif. Populasi penelitian berfokus pada sektor basic materials yang terdaftar di Bursa Efek Indonesia periode 2017-2020. Pengambilan sampel menggunakan teknik purposive sampling sehingga terdapat 127 sampel yang digunakan. Hasil penelitian menunjukkan bahwa reputasi auditor, financial expertise CEO, dan bankruptcy prediction berpengaruh terhadap audit delay. Sedangkan hasil yang berbeda pada audit complexity yang tidak berpengaruh terhadap audit delay.

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The Effect of Bankruptcy Possibility on Audit Delay and Timeliness (Empirical Study on Manufacturing Companies Listed in Indonesian Stock Exchange in the Period of 2012-2016)

Cited by 2 publications

References 0 publications

The Way Financial Distress Affects Financial Reporting Delay

The Way Financial Distress Affects Financial Reporting Delay

Pengaruh Reputasi Auditor, Audit Complexity, Financial Expertise CEO, dan Bankruptcy Prediction terhadap Audit Delay

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