The Influence of XBRL, Independent Commissioner, Management Ownership, and Operation Complexity on Timeliness of Financial Reporting: Evidence from Indonesian Energy Sector

Abstract

Timeliness is one of the indicators of relevant characteristics which means that the information in financial statements is ready to be used before it loses its meaning by users of financial statements, especially in making business decisions. The purpose of this research is to investigate the effects of eXtensible Business Reporting Language (XBRL), independent commissioner, managerial ownership, and operation complexity on timeliness of annual financial reporting. The population are energy sector companies listed on the Indonesia Stock Exchange for the 2016-2020 period. The samples are 49 energy sector companies or 245 observation, was selected by purposive sampling method and using secondary data. The collected data in this research were analyzed using logistic regression. The findings provide evidence that XBRL, independent commissioner, management ownership, and operation complexity affects timeliness of financial reporting simultaneously, while only XBRL affects timeliness of financial reporting partially. It implies that the XBRL format improves the timeliness of financial reports. The timely provision of information by agents to principals can help principals to make business decisions.

Effect of Management Ownership, Industry Auditor Specialization, Audit Complexity and Auditor Switching on Timeliness of Financial Reporting

“…Agency theory is a theory that explains the existence of a relationship that arises when the principal entrusts his capital to be operationalized by the agent in a business, both services, trade and manufacturing (Supriadi, 2020). Agency problems usually occur due to differences in interests between agents and principals in increasing individual satisfaction (Triyanto & Kusumaningtyas, 2022). This is considered by the agent to make decisions for personal gain but to the detriment of the principal (Nirmanggi & Muslih, 2020).…”

“…The large number of subsidiaries causes the company to have more operating units to examine records and transactions, so this will affect the auditor's time to complete the audit work (Pratama & Ciptani, 2018). In agency theory, companies that have a high level of audit complexity tend to cause agency problems, because companies will tend to be timely in submitting their financial reports (Triyanto & Kusumaningtyas, 2022). The large number of subsidiary companies reflects that the company has more operating units so that the auditor takes longer to complete the audit work (Dewi & Wahyuni, 2021).…”

“…The faster the financial reports are made, the better the information conveyed is useful for users. Vice versa, if there is an unreasonable delay in financial reports, it will cause users to lose their relevance in making decisions (Triyanto & Kusumaningtyas, 2022).…”