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Volume :48 Issue : 184 2022      Add To Cart                                                                    Download

The Impact of the Expanded Audit Report on the Audit Report Lag: A Field Study from the Saudi Audit Market

Auther : Dr. Mohammed A. Al-abbas

Objectives: This study aims at examining the impact of implementing the international auditing standards No. 700 and 701 on the audit report lag in the Saudi kingdom, which is the period between the end of the fiscal year and the date of issuing the audit report.
Method: A Generalized linear model was used to study the relation between the audit report lag and a number of variables reviewed in the literature of the audit reports: variables related to the characteristics of the audit office, and variables related to the characteristics of the customer.
The data of the study was extracted from the financial reports of the Saudi companies listed in the Saudi stock market for the fiscal years of 2016 and 2017. The final sample numbered 344 financial reports of the listed Saudi companies.
Results: The results showed that the average audit report lag  for the listed companies ranged between 7-109 days with a mean of 44 days. The audit report lag for the companies in 2016 ranged between 7-57 days with a mean of 42 days and a standard deviation of 12 days. In 2017, the audit report lag was between 7-109 days with a mean of about 46 days and a standard deviation of nearly 17 days. The results also indicated a statistically significant effect between the audit report lag and the implementation of the extended audit standards No. 700 and No. 701 with an effect that extends to two more days than the general average.
Conclusion: The results of this study confirm that the international auditing standards have a significant impact on the business environment in the Kingdom of Saudi Arabia, the thing that backs the decision of the Capital Market Authority to amend the maturity period for submitting financial statements from 45 days to 90 calendar days. In addition, the study recommends conducting more researches (surveys, personal interviews) to explore the underlying factors within the audit offices.

Keywords: Audit report lag, International audit standards, Saudi Arabia, Listed firm.

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