Ownership structure and audit report lag of Saudi listed firms: A dynamic panel analysis

Abstract

AbstractThis study investigates the impact of ownership structure on firms’ audit report lag. The research sampled 102 Saudi non-financial listed companies’ data from 2012 to 2021. The data was analysed using a generalised method of moments (GMM) framework. The findings significantly suggest that as managerial ownership rises, audit delay may increase. However, family and institutional ownership may enhance the financial reporting timeliness of the firms. Also, the results demonstrate that government ownership appears insignificant in determining the firms’ audit delay. The outcome of this study implies that in the Saudi context, family and institutional monitoring seems to be an effective control mechanism that may force managers to embrace the timely disclosure of financial reports. Policymakers and investors may find the research outcome helpful in understanding additional factors influencing audit report lag. Thus, reducing the financial reporting lag may mitigate information asymmetry, thereby enhancing investors’ confidence.

Keywords

• Ownership structure
• audit report lag
• financial reporting timeliness
• Saudi non-financial listed firms
• dynamic panel model