What Best Explains Reporting Delays? A SME Population Level Study of Different Factors

Lukason, Oliver; Miñano, María del Mar Camacho

doi:10.3390/su13094663

Cited by 8 publications

(11 citation statements)

References 59 publications

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“…Meanwhile, a later deadline for the company administrators to deliver the financial statements could mean a delay in issuing the audit report. The causes and determining factors regarding delays in drawing up the financial statements in SMEs have been dealt with in the recent literature [18,23,24].…”

Section: Literature Review and Hypothesismentioning

confidence: 99%

“…The previous literature has noted that those companies with greater delays in audit report presentation tend to have greater financial difficulties; that is, their financial results are worse, pointing to the existence of losses [11,12], high leverage ratio [11,13], lower profitability [14,15] or a greater likelihood of failure [16,17]. Therefore, and as pointed out by Lukason and Camacho-Miñano [18] (p. 2), a greater delay in the presentation of financial data could be taken to be an indicator of the company's unsustainability.…”

Section: Introductionmentioning

confidence: 95%

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Audit Report Lag. Differential Analysis between Spanish SMEs and Non-SMEs

Escaloni

Mareque

2021

Sustainability

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Audit report lag is considered to be an indicator of audit punctuality and efficiency, while the existence of factors that may determine this lag has been signalled in previous studies. The objective of this study is to identify the determinants of audit report lag in Spanish SMEs, and to analyse the potential singularities of these factors with regards to non-SMEs. With this aim in mind, a set of factors has been analysed; in the previous literature, a relationship has been observed between these factors and the characteristics of the audited company, the auditor and the audit exercise. Additionally, the possible influence of financial crisis and recovery periods is analysed. The sample analysed is made up of 3217 unlisted Spanish firms for the years 2008–2015. Multiple linear regression analysis is used, modelling the audit report lag based on the independent variables related to the characteristics of the audited company, the auditor and the audit exercise. Based on the results obtained, we can support the existence of differences among the independent variables responsible for the audit report lag based on company type (SME/non-SME), with a larger number of factors impacting the audit report lag in SMEs. It is worth noting the significant relationship between audit report lag and opinion and crisis variables, both for the SME and non-SME models. In the case of SMEs, links between audit report lag and the likelihood of bankruptcy, auditor type, number of economic activities carried out by the audited company, the industry to which the audited company pertains, and audit fees were also observed. Furthermore, we can conclude that audit report lag is greater in SMEs and that the independent variables explaining report lag differ according to whether the company is an SME or not.

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Section: Literature Review and Hypothesismentioning

confidence: 99%

Section: Introductionmentioning

confidence: 95%

Audit Report Lag. Differential Analysis between Spanish SMEs and Non-SMEs

Escaloni

Mareque

2021

Sustainability

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“…Recent financial scandals globally have also raised concerns about the ability to rely on financial statements. In addition, the pressure of financial crises in many countries has increased the demand for high-quality auditing during recent years (Zureigat 2011;Kim 2021;Escaloni and Mareque 2021;Lukason and Camacho-Miñano 2021;Lukason and Camacho-Miñano 2019). Due to terrible financial scandals of companies such as Enron and WorldCom in the United States or Pacific Electric Wire & Cable and Summit Technology in Taiwan (Chen 2016), as well companies in the European financial crisis such as Parmalat in Italy, Ahold in the Netherlands, and Gescartera & BBVA in Spain, reliance on financial statements and audit work has been mistrustful (Pucheta-Martínez and Fuentes 2007).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Mandatory Audit Firm Rotation on Earnings Management and Audit Fees: Evidence from Iran

Salehi

Zimon

Tarighi

et al. 2022

JRFM

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The present study aims to investigate the effects of mandatory requirements of audit firm rotation on earnings management among companies listed on the Tehran Stock Exchange (TSE). The study population consists of 1030 observations and 103 companies listed on the TSE during the years 2003–2012; moreover, the statistical technique used to test the hypotheses is panel data and pooled data. The results showed that the rule of mandatory audit firm rotation increased accruals-based earnings management (AEM) significantly. In addition, outcomes demonstrated that mandatory requirements of audit firm rotation did not have a significant influence on real earnings management (REM) and audit fees. Overall, our findings proved that the mandatory requirements of audit firm rotation in Iran have not been able to prevent the opportunistic actions of management at a time when they were faced with severe financial problems because of economic sanctions and auditors taking standardized systems-based auditing approaches. This research will make investors and others aware of the fact that mandatory audit firm rotation might be not effective in stopping managers wishing to manipulate the accounting figures. This paper actually suggests that when firms have financial distress, regulatory mechanisms such as audit firm rotation may not have a deterrent role. Our findings give lawgivers a stark warning that the length of an audit firm’s tenure should be based on the features of the audit market structure of each country.

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“…As already noted in the introduction, most prior research on accounting timeliness has been based on data from public firms. Recently, however, a couple of studies have investigated timeliness among private firms in the UK (Clatworthy and Peel, 2016), Belgium (Luypaert et al , 2016; Selleslagh et al , 2021), Estonia (Lukason and Camacho-Miñano, 2019, 2020, 2021) and Spain (Escaloni and Mareque, 2021).…”

Section: Definitions Previous Research and Development Of Hypothesesmentioning

confidence: 99%

“…More specifically, this paper focuses on the relationship between auditing/non-auditing and timeliness using a sample of Swedish private firms. Of the prior studies within this field that have analyzed timeliness in private firms (Clatworthy and Peel, 2016; Escaloni and Mareque, 2021; Lukason and Camacho-Miñano, 2019, 2020, 2021; Luypaert et al , 2016; Selleslagh et al , 2021), only two (Clatworthy and Peel, 2016; Luypaert et al , 2016) considered the association between audit, non-audit and timeliness. This is somewhat surprising given that auditing is a potent corporate governance mechanism.…”

Section: Introductionmentioning

confidence: 99%

The relation between auditing and accounting timeliness in Swedish private firms

Hartwig

Hansson

Nielsen

et al. 2023

JFRC

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Purpose The purpose of this study is to examine the relationship between auditing/non-auditing and accounting timeliness among Swedish private firms. Design/methodology/approach This paper uses regression analysis to test the relationship between auditing and two measurements of timeliness; lead time and late filing. The sample consists of Swedish private firms. Findings This paper finds that audited firms, when compared with unaudited firms, are significantly less timely. Moreover, greater profitability was associated with more timeliness but only for audited firms. The results of this paper also show that firms being audited by a big 4 auditor are significantly timelier than firms being audited by a non-big 4 auditor. Practical implications The findings in this paper suggests that one aspect of accounting quality, timeliness, does not seem to benefit from auditing in a Swedish context. There is a debate about whether the threshold levels in Sweden should be raised so that more firms voluntarily can opt out of audit. Those opposing a raised threshold level claim that auditing has positive effects on accounting quality and consequently that a raised level would have adverse effects. The findings in this paper do not support such a claim. Originality/value Little is known about timeliness in private firms compared to public firms and this paper fills that void. Contrary to prior research, findings show that unaudited firms in a Swedish regulatory setting actually are timelier than their audited counterparts. This questions one of the (presumed) benefits of auditing and should stimulate more research on this issue.

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What Best Explains Reporting Delays? A SME Population Level Study of Different Factors

Cited by 8 publications

References 59 publications

Audit Report Lag. Differential Analysis between Spanish SMEs and Non-SMEs

Audit Report Lag. Differential Analysis between Spanish SMEs and Non-SMEs

The Effect of Mandatory Audit Firm Rotation on Earnings Management and Audit Fees: Evidence from Iran

The relation between auditing and accounting timeliness in Swedish private firms

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