Effects of Presence of Audit Committee and Its Characteristics on Audit Report

Abstract

This study examines the impacts of the existence of audit committee and its characteristics on audit report lag. The characteristics consist of audit committee’s financial expertise, experience, gender, size, and independence. The impact of audit committee on audit report lag was investigated before and after the adoption of internal control guideline in the period from 2008 to 2014.Using a sample of 54 firms in a combined panel data, the results showed that there is no significant relationship between the existence of audit committee and audit report lag. Furthermore, the impact of audit committee characteristics on audit report lag in the period after the adoption of internal control guideline, during the years from 2012 to 2014, were examined. The results from studying 142 firms in a model of combined panel data showed that there is a significant negative relationship between audit committee financial expertise and experience with audit report lag. The examination for the other audit committee characteristics showed no significant relationship between them and audit report lag.

Keywords

• audit committee
• audit committee characteristics
• audit report lag
• agency theory