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The relationship between audit report delay and investment opportunities

Author

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  • Zeinab Azami

    (Shahid Bahonar University of Kerman)

  • Tabandeh Salehi

    (Shahid Bahonar University of Kerman)

Abstract

Higher investment opportunities can increase audit risk. Therefore, external auditors need to extend the scope of their substantive tests and their audit work, and in turn, this leads to longer audit report delay. This study aims at investigating the relationship between audit report delay and the extent of investment opportunities among firms listed on Tehran stock exchange (TSE). We tested our hypotheses on a sample of 133 firms listed on TSE during the period 2006–2014, using multivariate regression analysis on panel data. Our results revealed that the audit report delay is longer for firms with higher investment opportunities. The research results also show that small companies, lost companies and companies that have major weakness in internal controls, are likely to have a longer delay in the audit report. The delay in the audit report of companies that had an independent auditor change is greater during the current period. The paper provides useful information for firms’ management and external auditors.

Suggested Citation

  • Zeinab Azami & Tabandeh Salehi, 2017. "The relationship between audit report delay and investment opportunities," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(3), pages 437-449, December.
    • Handle: RePEc:spr:eurasi:v:7:y:2017:i:3:d:10.1007_s40821-016-0070-4
    DOI: 10.1007/s40821-016-0070-4
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    References listed on IDEAS

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    Cited by:

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    2. Beylem Çelik & Gökhan Özer & Abdullah Kürşat Merter, 2023. "The Effect of Ownership Structure on Financial Reporting Timeliness: An Implementation on Borsa Istanbul," SAGE Open, , vol. 13(4), pages 21582440231, November.
    3. Muhammad Arif Khan & Xuezhi Qin & Khalil Jebran, 2020. "Uncertainty and leverage nexus: does trade credit matter?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 355-389, September.
    4. Imen Fakhfakh & Anis Jarboui, 2022. "Earnings Management and Audit Report Lag: The Role of Audit Risk-Tunisian Evidence," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 21(1), pages 113-135, March.
    5. Datis Khajeheian & Mike Friedrichsen, 2017. "Editorial note," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(2), pages 157-159, August.

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    More about this item

    Keywords

    Investment opportunities; Audit report delay; Audit risk; Independent auditors;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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