Corporate Governance and Audit Report Timeliness: Evidence from Malaysia

Abstract

Purpose – The purpose of this study is to examine the impact of corporate governance characteristics on audit report timeliness in Malaysia. The corporate governance characteristics examined are board independence, audit committee size, audit committee meetings and audit committee members' qualifications.

Design/Methodology/Approach – The sample comprises of 703 Malaysian listed companies from Bursa Malaysia, for the year 2009. It excludes companies from the finance-related sector as they operate under a highly regulated regime under supervision by the Central Bank of Malaysia. Further, regression analysis was performed to examine the audit report timeliness determinants.

Findings – Results show that audit report timeliness is influenced by audit committee size, auditor type, audit opinion and firm profitability. However, no association was found between board independence, audit committee meetings, audit committee members' qualifications and audit report timeliness.

Research limitations/Implications – It is a cross-sectional study of the year 2009. Practical implications for policy makers are consideration of the minimum submission period for audit reports Regulators' support for firms to have larger audit committee sizes is also discussed.

Originality/Value – The study investigates the impact of corporate governance on audit timeliness in light of the recent amendments to the Malaysian Code of Corporate Governance made in 2007.

Citation

Puat Nelson, S. and Norwahida Shukeri, S. (2011), "Corporate Governance and Audit Report Timeliness: Evidence from Malaysia", Susela Devi, S. and Hooper, K. (Ed.) Accounting in Asia (Research in Accounting in Emerging Economies, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 109-127. https://doi.org/10.1108/S1479-3563(2011)0000011010