The Moderating Role of Type of Audit Firm on the Relationship between Good Corporate Governance and Audit Report Lag of Companies Listed on The Stock Exchange of Thailand
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Published:
Jul 30, 2019
Keywords:
audit firm, audit report lag, corporate governance
Main Article Content
Abstract
The purpose of this research was to examine the moderating effect of audit firm type on the relationship between good corporate governance (CG) and audit report lag. The 2,121 data was collected from the annual reports of companies listed on The Stock Exchange of Thailand between 2012 and 2016. This study included independent variables relating to CG characteristics consisted of 1) board committee characteristics including size, independence, duality, and number of meetings, 2) audit committee characteristics including size, financial or accounting expertise, number of meetings, and 3) disclosure and transparency. Moreover, this study used type of audit firm (Big 4 and Non-Big 4) as a moderating variable. A multiple regression analysis indicated that BIG 4 audit firms strengthened the negative relationship between board size and audit report lag, compared to Non-Big 4 audit firms.
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Nithibandanseree, P., Ekasingh, E., & Saraphaiwanich, N. (2019). The Moderating Role of Type of Audit Firm on the Relationship between Good Corporate Governance and Audit Report Lag of Companies Listed on The Stock Exchange of Thailand. WMS Journal of Management, 8(3), 22–36. Retrieved from https://so06.tci-thaijo.org/index.php/wms/article/view/206428
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Research Articles-Academic Articles
References
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Behn, B. K., Choi, J., & Kang, T. (2008). Audit Quality and properties of Analyst Earnings Forecasts. The Accounting Review, 83(2), 327-349.
Botosan, C. A. (1997). Disclosure level and the cost Of equity capital. The Accounting Review, 72(3), 323-349.
Botosan, C. A., & Plumlee, M. (2002). A re- examination of discosure level and the expected cost of equity capital. Journal of Accounting Research, 40, 21-40.
Chang, M., Anna, G. D., Watson, I., & Wee, M. (2008). Does Disclosure Equality via Investor Relations Affect Information Asymmetry?
Australian Journal of Management, 33(2), 375-390.
Chen, H. W., Chin, S. W., & Victor W. (2008). The Release Timing of Annual Reports and Board Characteristics. The International Journal of Business and Finance Research, 2(1), 105-118.
Cheng, C. S. A., Collins, D., & Huang, H. (2006). Investors’ Interpretations of the October 15, 2002 Standard & Poors Transparency and Disclosure Rankings. Working Paper,
University of Houston, University of Memphis and Butler University.
Ezat, A., & El-Masry, A. (2008). The Impact of Corporate Governance on the Timeliness of Corporate Internet Reporting by Egyptian Listed companies. Managerial Finance, 34(12), 848-869.
Hashim, U. J. B., & Rahman, R. B. A. (2011). Audit Report Lag and the Effectiveness of Audit Committee Among Malaysian Listed Companies. EuroJournals, 10, 50-61.
Hassan, M. Y. (2016). Determinants of audit report lag: evidence from Palestine. Journal of Accounting in Emerging Economics, 6(1), 13-32.
Jiemsakul, S. (2007). The Performance Effects of Transparency and Disclosure, and Board of Directors: The Case of SET100 Thailand. (Ph.D. Thesis, Chulalongkorn University, Thammasat University and National Institute of Development Administration, Thaialnd).
Lawrence, A., Minutti-Meza, M., & Zhang, P. (2011). Can Big4 versus Non-Big4 differences in audit-quality proxies be attributed to client characteristics? The Accounting
Review, 86(1), 259-286.
Lennox, C. S. (1999). Are large auditors more accurate than small auditors? Accounting and Business Research, 29(3), 217-227.
Leventis, S., Weetman, P., & Caramanis, C. (2005). Determinants of audit report lag: Some evidence from the Athens Stock Exchange. International Journal of
Auditing, 9(2005), 45-58.
Li, J., Mangena, M., & Pike, R. (2012). The effect of audit committee characteristics on intellectual capital disclosure. The British Accounting Review, 44(2),
98-110.
Madi, H. K., Ishak, Z., & Manaf, N. A. A. (2014). The Impact of Audit Committee Characteristics on Corporate Voluntary Disclosure. Procedia Social and Behavioral
Sciences, 164(2014), 486-492.
Mine, A., & Arman, K. (2006). Transparency and disclosure scores and their determinants in the Istanbul Stok Exchange. Journal Compilation, 14(4), 277-296.
Mohamad, N. M. N., Rohami, S., & Wan, N. W. H. (2010). Corporate Governance and Audit Report Lag in Malaysia. Asian Academy of Management Journal of Accounting and
Finance, 6(2), 57-84.
Owusu-Ansah, S. (2000). Timeliness of corporate financial reporting in emerging capital markets: Empirical evidence from the Zimbabwe Stock Exchange. Accounting and Business Research, 30(3), 241-254.
Owusu-Ansah, S., & Leventis, S. (2006). Timeliness of corporate annual financial reporting in Greece. European Accounting Review, 15(2), 273-287.
Patel, S. A., Balic, A., & Bwakira, L. (2002). Measuring Transparency and Disclosure at Firm-Level in Emerging Markets. Emerging Markets Review, 3, 325-337.
Patel, S. A., & Dallas, G. (2002). Transparency and Disclosure: Overview of Methodology and Study Results – United States. Working Paper.
Phanphairoj, A. (2015). patčhai thī song phon tō̜ kāntatsinčhai lư̄ak chai bō̜rikān samnakngān sō̜p banchī khō̜ng bō̜risat ʻǣkhōm ʻō̜dit čhamkat [Factors
that influence the decision to use the services of an audit firm ACHOME AUDIT Limited]. (Master’s Thesis, Silpakorn University, Thailand).
Pongsaporamat, P. (2010). Earnings Attributes and Corporate Disclosure And Transparency: Empirical Evidence from Thailand. (PhD. Thesis, Chulalongkorn
University, Thaialnd).
Rombaramee, P. (2007). khwām thantō̜ wēlā naikān pœ̄tphœ̄i khō̜mūn khō̜ng bō̜risat čhotthabīan nai Talāt Laksap hǣng Prathēt Thai [Timeliness of
Disclosure of Listed Companies in The Stock Exchange of Thailand]. (Master’s Thesis, Burapha University, Thailand).
Samaha, K., Khlif, H., & Khaled H. (2015). The Impact of Board and Audit Committee Characteristics on Voluntary Disclosure: A meta-analysis. Journal of International Accounting Auditing and Taxation, 24(2015), 13-28.
Satayarakvit, S., & Phiphatthanasoen, A. (2012). khwāmsamphan rawāng kānkam kap dūlǣ kitčhakān læ raya wēlā thī chai nai kānʻō̜k rāingān kān sō̜p banchī
[The relationship between corporate governance and audit report lag]. (Master ’s Independent Study, Thammasat University, Thailand).
Schwartz, K. B., & Soo, B. S. (1996). The association between auditor changes and reporting lags. Contemporary Accounting Research, 13(1), 353-370.
Sharma, D. S., Boo, E., & Sharma, V. D. (2007). The impact of corporate governance on auditors’ client assessment, risk assessment and planning judgments. Working Paper. New Zealand: Auckland University of Technology.
Srijunpetch, S., Khanthavit, A., & Duenpen Chansirisi. (2009). kānkam kap dūlǣ kitčhakān phư̄a sāng mūnlakhā kitčhakān [Good Corporate governance to enhance
firm value]. Bangkok, Thaialnd: Amarin Printing & Publishing.
Srijunpetch, S. (2012). lakkān kamkap dūlǣ kitčhakān [Core of Corporate Governance]. Thammasat Business Journal, 35(133), 1-4.
Stewart, J., & Munro, L. (2007). The Impact of Audit Committee Existence and Audit Committee Meeting Frequency on the External Audit:
Perceptions of Australian Auditors. International Journal of Auditing, 11(2007), 51-69.
Sultana N., Harjinder, S., & Mitchell, V. (2015). Audit Committee Characteristics and Audit Report Lag. International Journal of Auditing,
19(2015), 72-87.
Thoopsamut, W. (2007). khwāmsamphan rawāng khunnasombat khō̜ng khana kammakān trūat sō̜p kap kānčhatkān kamrai nai ngop trai māt khō̜ng bō̜risat
čhotthabīan nai Talāt Laksap hǣng Prathēt Thai [The relationship between audit committee characteristics and earnings management in quarterly financial report
of companies listed in The Stock Exchange of Thailand]. (Master ’s Thesis, Chulalongkorn Universiity, Thailand).
Turel, A. G. (2010). Timeliness of financial reporting in emerging capital markets: Evidence from Turkey. European Financial and Accounting Journal, 5(1), 113-133.
Worachatthan, Y. (2007). khana kammakān bō̜risat : saolak khō̜ng kānkam kap dūlǣ kitčhakān thī dī [Board of Directors:Core of Good Corporate Governance. Journal of Money and Wealth, 9, 94-95.
Accounting Research, 10(1), 56-86.
Ahmad, R. A. R., & Kamarudin, K. A. (2003). Audit delay and the timeliness of corporate reporting: Malaysian evidence. Working Paper, Present at the Hawaii International Conference on Business Program.
Becker, C. L., Defond, M. L., Jiambalvo, J., & Subramanyam, K. R. (1998). The Effect of audit quality on earnings management. Contemporary Accounting Research, 15(1), 1-24.
Behn, B. K., Choi, J., & Kang, T. (2008). Audit Quality and properties of Analyst Earnings Forecasts. The Accounting Review, 83(2), 327-349.
Botosan, C. A. (1997). Disclosure level and the cost Of equity capital. The Accounting Review, 72(3), 323-349.
Botosan, C. A., & Plumlee, M. (2002). A re- examination of discosure level and the expected cost of equity capital. Journal of Accounting Research, 40, 21-40.
Chang, M., Anna, G. D., Watson, I., & Wee, M. (2008). Does Disclosure Equality via Investor Relations Affect Information Asymmetry?
Australian Journal of Management, 33(2), 375-390.
Chen, H. W., Chin, S. W., & Victor W. (2008). The Release Timing of Annual Reports and Board Characteristics. The International Journal of Business and Finance Research, 2(1), 105-118.
Cheng, C. S. A., Collins, D., & Huang, H. (2006). Investors’ Interpretations of the October 15, 2002 Standard & Poors Transparency and Disclosure Rankings. Working Paper,
University of Houston, University of Memphis and Butler University.
Ezat, A., & El-Masry, A. (2008). The Impact of Corporate Governance on the Timeliness of Corporate Internet Reporting by Egyptian Listed companies. Managerial Finance, 34(12), 848-869.
Hashim, U. J. B., & Rahman, R. B. A. (2011). Audit Report Lag and the Effectiveness of Audit Committee Among Malaysian Listed Companies. EuroJournals, 10, 50-61.
Hassan, M. Y. (2016). Determinants of audit report lag: evidence from Palestine. Journal of Accounting in Emerging Economics, 6(1), 13-32.
Jiemsakul, S. (2007). The Performance Effects of Transparency and Disclosure, and Board of Directors: The Case of SET100 Thailand. (Ph.D. Thesis, Chulalongkorn University, Thammasat University and National Institute of Development Administration, Thaialnd).
Lawrence, A., Minutti-Meza, M., & Zhang, P. (2011). Can Big4 versus Non-Big4 differences in audit-quality proxies be attributed to client characteristics? The Accounting
Review, 86(1), 259-286.
Lennox, C. S. (1999). Are large auditors more accurate than small auditors? Accounting and Business Research, 29(3), 217-227.
Leventis, S., Weetman, P., & Caramanis, C. (2005). Determinants of audit report lag: Some evidence from the Athens Stock Exchange. International Journal of
Auditing, 9(2005), 45-58.
Li, J., Mangena, M., & Pike, R. (2012). The effect of audit committee characteristics on intellectual capital disclosure. The British Accounting Review, 44(2),
98-110.
Madi, H. K., Ishak, Z., & Manaf, N. A. A. (2014). The Impact of Audit Committee Characteristics on Corporate Voluntary Disclosure. Procedia Social and Behavioral
Sciences, 164(2014), 486-492.
Mine, A., & Arman, K. (2006). Transparency and disclosure scores and their determinants in the Istanbul Stok Exchange. Journal Compilation, 14(4), 277-296.
Mohamad, N. M. N., Rohami, S., & Wan, N. W. H. (2010). Corporate Governance and Audit Report Lag in Malaysia. Asian Academy of Management Journal of Accounting and
Finance, 6(2), 57-84.
Owusu-Ansah, S. (2000). Timeliness of corporate financial reporting in emerging capital markets: Empirical evidence from the Zimbabwe Stock Exchange. Accounting and Business Research, 30(3), 241-254.
Owusu-Ansah, S., & Leventis, S. (2006). Timeliness of corporate annual financial reporting in Greece. European Accounting Review, 15(2), 273-287.
Patel, S. A., Balic, A., & Bwakira, L. (2002). Measuring Transparency and Disclosure at Firm-Level in Emerging Markets. Emerging Markets Review, 3, 325-337.
Patel, S. A., & Dallas, G. (2002). Transparency and Disclosure: Overview of Methodology and Study Results – United States. Working Paper.
Phanphairoj, A. (2015). patčhai thī song phon tō̜ kāntatsinčhai lư̄ak chai bō̜rikān samnakngān sō̜p banchī khō̜ng bō̜risat ʻǣkhōm ʻō̜dit čhamkat [Factors
that influence the decision to use the services of an audit firm ACHOME AUDIT Limited]. (Master’s Thesis, Silpakorn University, Thailand).
Pongsaporamat, P. (2010). Earnings Attributes and Corporate Disclosure And Transparency: Empirical Evidence from Thailand. (PhD. Thesis, Chulalongkorn
University, Thaialnd).
Rombaramee, P. (2007). khwām thantō̜ wēlā naikān pœ̄tphœ̄i khō̜mūn khō̜ng bō̜risat čhotthabīan nai Talāt Laksap hǣng Prathēt Thai [Timeliness of
Disclosure of Listed Companies in The Stock Exchange of Thailand]. (Master’s Thesis, Burapha University, Thailand).
Samaha, K., Khlif, H., & Khaled H. (2015). The Impact of Board and Audit Committee Characteristics on Voluntary Disclosure: A meta-analysis. Journal of International Accounting Auditing and Taxation, 24(2015), 13-28.
Satayarakvit, S., & Phiphatthanasoen, A. (2012). khwāmsamphan rawāng kānkam kap dūlǣ kitčhakān læ raya wēlā thī chai nai kānʻō̜k rāingān kān sō̜p banchī
[The relationship between corporate governance and audit report lag]. (Master ’s Independent Study, Thammasat University, Thailand).
Schwartz, K. B., & Soo, B. S. (1996). The association between auditor changes and reporting lags. Contemporary Accounting Research, 13(1), 353-370.
Sharma, D. S., Boo, E., & Sharma, V. D. (2007). The impact of corporate governance on auditors’ client assessment, risk assessment and planning judgments. Working Paper. New Zealand: Auckland University of Technology.
Srijunpetch, S., Khanthavit, A., & Duenpen Chansirisi. (2009). kānkam kap dūlǣ kitčhakān phư̄a sāng mūnlakhā kitčhakān [Good Corporate governance to enhance
firm value]. Bangkok, Thaialnd: Amarin Printing & Publishing.
Srijunpetch, S. (2012). lakkān kamkap dūlǣ kitčhakān [Core of Corporate Governance]. Thammasat Business Journal, 35(133), 1-4.
Stewart, J., & Munro, L. (2007). The Impact of Audit Committee Existence and Audit Committee Meeting Frequency on the External Audit:
Perceptions of Australian Auditors. International Journal of Auditing, 11(2007), 51-69.
Sultana N., Harjinder, S., & Mitchell, V. (2015). Audit Committee Characteristics and Audit Report Lag. International Journal of Auditing,
19(2015), 72-87.
Thoopsamut, W. (2007). khwāmsamphan rawāng khunnasombat khō̜ng khana kammakān trūat sō̜p kap kānčhatkān kamrai nai ngop trai māt khō̜ng bō̜risat
čhotthabīan nai Talāt Laksap hǣng Prathēt Thai [The relationship between audit committee characteristics and earnings management in quarterly financial report
of companies listed in The Stock Exchange of Thailand]. (Master ’s Thesis, Chulalongkorn Universiity, Thailand).
Turel, A. G. (2010). Timeliness of financial reporting in emerging capital markets: Evidence from Turkey. European Financial and Accounting Journal, 5(1), 113-133.
Worachatthan, Y. (2007). khana kammakān bō̜risat : saolak khō̜ng kānkam kap dūlǣ kitčhakān thī dī [Board of Directors:Core of Good Corporate Governance. Journal of Money and Wealth, 9, 94-95.