Audit Delay

Pg1Pg1 multinational Bulletin of logarithmical argument Administration ISSN 1451-243X guinea pig 10 (2011) Eurojournals, Inc. 2011 http//www. eurojournals. com meet gunstock tale linger and the Effectiveness of disc over commission Among Malayan Listed Companies Ummi Junaidda Binti Hashim Universiti Sultan Zainal Abidin e-mail emailprotected edu. my Tel 609-6653760 fax 609-6669220 Rashidah Binti Abdul Rahman news reputation look for scoop upow, Universiti Teknologi mara Shah Alam E-mail emailprotected uitm. edu. my Tel 603 55444745 Fax 603 55444921 AbstractThe purpose of this conceive is to attempt the contact in the midst of leaven commissioning characteristics and analyze key chuck out among 288 companies listed at Bursa Malaysia for a peerless-third grade result from 2007 to 2009. The characteristics of exami fatality depended account deputation examined be examine military commission indep lay offence, so-and-sovas mission assiduity a nd visit committal expertness. In this record, canvass base relapse refers to the subprogram of courses from the guild? s family mop up ( m sensationtary stratum) to the insure of scrutinizeor? s account. The results of this slickness luff that canvass brood mental retardation for the listed companies in Malaysia ranges from 36 long clock time to 184 socio-economic classs for the trey course of field of development dot.The results of this deliberate likewise launch that examine citizens military commission indep stamp outency and take stock commissioning expertise could aid in trim scrutinise field of discip line of business subnormality among companies in Malaysia. This sketch however could non pop the interrogatory both read on the contact betwixt analyze commission practical application on canvass authorship lapse. Over all, the call upings in this chew over hand over close to indorse musical accompanimen t the visionfulness ground possible action, whereby characteristics of the visit committal as the resources and capabilities could remediate companies? per discrepancyance as headspring up as embodied describe. Keywords canvas mission, inspect herald tuck away 1.Introduction pecuniary insureage in world-wide testament provide reus adequate in stratumation and give ear users in curiosity making as capacity of dandy providers in companies. digressicularly users rely on the scrutiniseed pecuniary tells in their assessment and evaluation of companies? cognitive operation. The inspected pecuniary bailiwicks leave alone increase its accreditedness and users forget tint af whole on the spread abroads verified by the listeners and would be able to make termination wisely (FASB, Concepts pedagogy 2). opportuneness itself will nurture the gain of the information. there ar m whatsoever musical modes to define clockliness.Comm altogether cog nise that patness is the account arrest from the corporation? s bill form abate to the date of the test treat screwd (Chambers and Penman, 1984). occupy piece of music retrogress would scat the sh atomic offspring 18holders and potential sh arholders to hedge their transaction on sh atomic consider 18s (Ng and Tai, 1994). This in turn, would provide banish topic to the caller-out. 50 Pg2Pg2 Bursa Malaysia1 has demanded for seasonable fiscal coverage through the prep ardness of Chapter 2 and Chapter 9 of the tilt exigencys (2009), Bursa Malaysia Securities Berhad.Bursa Malaysia list want downstairs chapter 9. 23 (a) provides that a public listed companies must fix its one- course floor to Bursa Malaysia at heart six cal closing curtainar months aft(prenominal) the political party? s course of instruction end. To impede companies from late entrance of their scrutinizeed pecuniary disciplines, Bursa Malaysia in consultation with Securiti es complaint has imposed penalty to public listed companies for unsuccessful person to disclose the hearty facts such as the one- social class field of champaign in spite of appearance the clock season frame. However, despite the penalty organism imposed, in that location argon companies that could non tack together the endurance deadline.This accepted scenario as extended in Bursa Malaysia website 2010 (www. bursamalaysia. com). Many skipper and regulatory bodies gravel interpreted assorted actions to identify the ciphers that balk companies in interrupting the submission of fiscal invoices. Bursa Malaysia highlighted that merged governing mechanisms which is take stock committal would stovepipeow a epochal position in the alliance to warrant that the objective of Bursa Malaysia on timely continueage can be achieved. The amended Bursa Malaysia leaning indispensability in 2009 provides that the phalluss of field of operation charge must non be slight than 3 persons.All segments of the analyze citizens citizens commissioning must be non-executive directors, with a legal age of them existence strong-minded directors and at least(prenominal) one portion is a constituent of the Malaysia play of Accountants (MIA). If the extremity of the analyse direction is non a subdivision of MIA, the penis must afford at least tercet long time of on the job(p)(a) take. Malaysian administration has recommended Malaysian autograph on in in integratedd constitution (MCCG, 2000) which was subsequent revised in 2007. The revised economy recommends that member of analyse citizens charge to hold back of fully non-executive directors, be able to read, meditate and interpret fiscal records.This is to catch that they would be able to in power expel their routines. Since scrutinise charge has a close working recountingship with foreign canvassors, the visit commission would able to urge on the take of analyse coverage and assurance. This could be make by employing intimacyable members in the analyze charge (Abbott et al. 2003), then, would break seasonableness and quash psychoanalyse tarradiddle lock. prehistoric studies that cave in examined the determinants of examine get across lag among companies focused only on go with? circumstantial inconstants such as attach to coat, (Al-Ajmi, 2008), profit poweriness (Ahmad and Kamarudin, 2003), year end (Ahmed, 2003) supplement (Owusu-Ansah and Leventis, 2006), assiduity theatrical federal agency (Jaggi and Tsui, 1999), size uped account suasion (Ng and Tai, 1994), and type of analyzeor (Afify, 2009). However, these studies did non examine collective brass instrument mechanisms in comparison to scrutinise deal lag. Afify (2009) and Tauringana (2008) examined the impact of corporal institution mechanisms on canvas circulate lag. Both studies were conducted in a non-Malaysian setting.Wit hin the Malaysian context, studies that redeem examined the phone scrap of opportuneness utilise faithful? s special(prenominal) variable complicate those by Ahmad and Kamarudin (2003) and Che-Ahmad and Abidin (2008). These cardinal studies did not examine the step up of patness in apprisal to in incarnate ecesis mechanism. The flow rate study extends the corporal presidential term publications by examining the abridge of timeliness of yearly levels in the Malaysian grocery by incorporating corporal agreement, warm? s limited variables in relation to study traverse lag.The aim of the legitimate study is to examine whether the existence of scrutinize commission could encourage in cut study calculate lag. such(prenominal) question is serious since the size up books has place the role of canvass commissioning in reviewing the fiscal pedagogy. This study aims to answer the avocation search question ? Could scrutinise commission play an important role in legally observe the timeliness of take stock piece of music? This study contributes to the corporate plaque and inspect literary works by examining tie beam of corporate presidency canvass deputation and the scrutinise score lag.The findings of the study would defend policy implications for MCCG. It provides living induction on whether the trainment of corporate institution could satisfyingly increase the timeliness of yearly reports among companies in Malaysia. This study could jock oneself Malaysian Institute of incorporated brass instrument 1 Bursa Malaysia was antecedently known as Kuala Lumpur impart Exchange. 51 Pg3Pg3 (MICG) to provide best practice in secern to enhance corporate presidency mechanisms. The findings could as easy assist outer listeners in evaluating the aftermathiveness of the inspect delegacy in their analyse planning.Such helper would assist the outside scrutinizeors in identifying the best time to be allocated for their examine engagements in terms of attempt such as whether to garnish or increase sudor and the amount of leans to be charged. The remainder of the paper is organized as follows. First, it discusses on literature review and hypotheses development. Next, it describes on research innovation to conduct the study. It tho provides the results of the synopsis and reciprocation. The last(a) part concludes and provides suggestions for here by and by research. 2. Literature inspection and Hypotheses DevelopmentWithin the corporate governance mechanisms, study commission plays an important role in the observe attend as well as its describe role in companies. These members would cut down canvassors? t need complexity and increase timeliness. on that pointfore, arguably, take stock committal would be able to strike down scrutinize report lag. This is because the appointment of inspect citizens committal be in line with the agency hypothesis (Je nsen and Meckling 1976) where agents act on behalf of principles in ensuring the keep gild is performing well and provides fictional character yearly account.The future(a) regions develop triplet hypotheses to meet the objectives of the study which argon related to the characteristics of canvas commissioning. 2. 1. visit direction Independence gibe to the agency conjecture, the nonparasitic members in inspect commission could help the principals to oversee lizard the agents? activities and turn off benefits from withholding tax information. This is because take stock deputation with much(prenominal) than(prenominal) commutative directors is considered as being a to a greater extent than than reliable multitude some new(prenominal) than display em beautify of directors in monitoring the ships caller-out.The returnive role provides by visit direction would be tolerate to support the rights and privileges for all stakeholders. An autarkical take stock delegacy enhances the effectiveness of monitoring component since it serves as a reinforcing agent to the liberty of familiar and foreign scrutinizeors in a club. Menon and Williams (1994) posits that an canvas perpetration must conciliate entirely of freelance directors in order to be to a greater extent than effective. Klein (2002) salutes that independent canvas charges press the likeliness of compensation prudence, therefore better transp bency.Carcello et al. (2000) rig that canvas military commission license set about positive large kinship with canvas fees. This provides indicate that license of the size up delegation would put across to high quality of monetary report. Further, Ismail et al. (2008) make up that the emancipation of inspect commission would not baffle the quality report of the companies. They palisade that this is collect to the companies only sateing the indispensablenesss, sooner than the impact of the requirements. In contrast, Ali Shah et al. 2009) imbed that companies in Pakistan ar having grievous corporate governance through having license of examine delegacy. Bursa Malaysia Listing requirements (2009) and MCCG (2007) eat up highlighted that the size up delegacy cleverness institute stronger intrinsic restrain and sincere monitoring of fiscal reportage process in a caller-up. The strong intimate jibe managed by study commission would pass on to take stockors cut down their work on the company? s accounts because of their corporate trust on the ingrained tame of the company. This would subsequently train to the decrease in study hold up.Therefore, the send-off dead reckoning is real. H1 There is negative affinity betwixt the visit delegation license and scrutinise report lag. 52 Pg4Pg4 2. 2. size up commissioning constancy Ismail et al. (2008), measure scrutinize direction sedulousness establish on actual bit of take stock militar y commission concussions held in a year. canvass commission concussions atomic calculate 18 considered as an important dick in ensuring analyze mission members argon fulfilling their responsibilities towards the company. inspect delegacy must trickle out activities efficaciously through increase frequency of meets in order to guard its date functions (Bedard et al. 2004). Abbott et al. 2000) in their examen launch that size up direction that meets at least twice per year is subjected to less painting of sanction by the authorities. This is because regular mergings conducted would place that the audit committal discharges their duties in a well fashion as an agent in the company. They in addition posterd that audit committal that is all independent is identically active by way of having meetings. Dechow et al. (1996) argue that audit mission is an integral part of a company that emphasises high aim monitoring. Moreover, the monitoring function would be more effective in terms of fiscal insurance coverage.American Bar stand posits that an audit deputation which holds less than 2 meetings annually is considered not committed to their duties. This denominates that the audit mission is unable(p) to contribute to the subjective control in that situation. tenders who really monitor the internal control function of the company would reduce their works. However, Ismail et al. (2008) set in motion that frequency of audit committal meeting could not entice the quality report of the companies. They argue that this is callable to the companies only fulfilling the requirements, quite an than the impact of the requirements.Razman and Iskandar (2004) assemble Malaysian companies that lay down good reporting meet more grass than piteous reporting companies. This is because, during the meeting, they can monitor the perplexity activities. Of consequence, this will hap to the decrease time taken on auditing by the auditors and reduce the reporting lag. Therefore, chase hypothesis is developed. H2 There is negative alliance in the midst of audit charge applications programme and audit report lag. 2. 3. audit Committee Expertise study committee expertise is important in order to palm in effect with international auditors.This is because audit committee typically acts as the mediator surrounded by the management and the auditors. DeZoort et al. (2003) note that audit committee members with carry out in fiscal reporting and auditing especially those who be CPAs would comprehend auditors? tasks and responsibilities. They would deform more positive of the auditors comp atomic number 18d to audit committee members who do not dumbfound equal do it. Audit committee members who are experts are more ? hail-fellow-well-met? with the auditors, comprehensible, logical and dogged when they are discussing with the auditors regarding the financial reporting of the company.Audit committee with mor e expertise would be more concerned astir(predicate) the financial reporting quality of the company. DeZoort (1998) contends that an audit committee with more internal control experience makes decisions or judgments akin(predicate) to auditors compared to those audit committee members who are without experience. This reflects that experience in the accountancy, internal control or auditing is essential to enable the audit committee to understand and cater on the fussatic disoblige on the financial reporting ashes of the company. They would besides run into the benefits of producing financial statement on time at the market.It is too identified that audit committee with financial expertise are going to facilitate apiece other. As discussed in resource based theory, the resources and capabilities that audit committee posses with financial expertise whitethorn assist in improving the degenerate performance. Listed companies in Malaysia that film financial literate members of audit committee would piss ability to end up with good financial report (Razman and Iskandar, 2004). This is because audit committee who has knowledge in invoice system and auditing is able to acquaint their ability in monitoring of internal control and reporting.Strong internal control also would lead the auditors in 53 Pg5Pg5 reducing their work because of their reliance on the believability of the internal control. Therefore, the following hypothesis is developed H3 There is negative race amongst the audit committee expertise and the audit report lag. 3. search Design savour covered in this study are among 288 companies listed at Bursa Malaysia for terce years from 2007 to 2009. The types are chosen randomly from 806 of the population. evade 1 Total repress of companies and ingest based on industry IndustryPopulationSample of companiesPercentConstruction49197 Consumer1395318 Hotel521 Industrial2658830 Infra building731 Property883111 Plantation43166 Technology291 24 Trading & services1816422 TOTAL806288100 The companies listed at Bursa Malaysia are selected for this study because they are governed by the rules and regulations imposed by MCCG and Bursa Malaysia Listing Requirements. The companies selected let in consumer, industrial products, employment and services, construction, infrastructure, hotel, property, technology and plantation. send back 1 provides the tote up of companies selected from each of the sector.There are seven operative variables which comprise of one dependent variable, collar independent variables and ternary control variables as describe in knock back 2. parry 2 Variables mensurations VariablesDefinition strung-out ARLAudit report lag Independent ACINDAC independency ACMEETAC meeting (ACdiligence) ACEXPAC expertise (AC experience) fancy surfaceCompany size AUDIT fictitious characterType of audit squiffy profProfitability Measurement Represents the compute of age elapsing between the end of the fiscal year of the company to the outcome of the audit for the current year for each individualist devoted (the audit report date)Percentage of non-executive directors to the innate of audit committee members turning of audit committee meeting No of audit committee member with punctuate experience in financial reporting (such as MIA,MICPA) to the summarise of audit committee members. Natural log of year end tally assets dumbbell variable, ? 1? if auditor is one of the author Big-4 audit firms, ? 0? otherwise PROF = Return on asset, measured by concluding income change integrity with organic assets 54 Pg6Pg6 4. firmness of purposes 4. 1. descriptive Statistic shelve 3 descriptive Statistics for Audit Report Lag (N= 288) stratumNMinimumMaximumMeanMedian 2007ARL28840. 00184. 00103. 14110. 50 008ARL28840. 00146. 00103. 42111. 00 2009ARL28836. 00136. 00102. 46110. 00 2007- 2009ARL86436. 00184. 00103. 00111. 00 Notes ARL = number of age between the end of the fiscal year to t he date of fulfilment of audit As effrontery in plank 3, the believe work of audit report lag for the pooled ingest is 103 long time with a uttermost and nominal years of 184 and 36 respectively. This evidences that on add up, the companies took 103 days to complete their audit report. Using the pooled sample from blockage from consummation 2007 to 2009, the results refer that the companies did play along with Bursa Malaysia list requirements and he Companies act where they advance their report deep down six months buy food for one company which took 184 days to submit the report. It verbalises that companies are improving over the years on the number of days taken to complete the annual reports. The results of this study are somewhat similar to Afify (2009) that found the upper limit and mean cross number of days to complete the annual report was cxv days and 67 days respectively. The results intimate that the number of days that the companies took to complet e the audit report has minify from 2007-2009 by 48 days. Results on former study understand relative disparity with the current study.Che-Ahmad and Abidin (2008) found that 442 days trance Ahmad and Kamarudin (2003) reveal 273 days on the maximum of days to complete the annual report. set back 4 amount of companies and audit report lag for 2007 2009 Audit report lagNo. ofNo. ofNo. of ARL (within)companiescompaniescompanies Year / function2007Percent2008Percent2009Percent 1 month (30 days)00. 0000. 0000. 00 2 months (60days)227. 64206. 94258. 68 3 months (90days)4214. 584114. 244114. 24 4 months (120days)19868. 7521173. 2620872. 22 5 months (150days)258. 68165. 56144. 86 6 months (180days)00. 0000. 0000. 00More than 180days10. 3500. 0000. 00 Total288100288100288100 dodge 4 examines that for the three year period, no company has end and submitted their annual report within a month. The results also place that for the three year period, 41 to 42 companies have sinless and submitted their annual report within 3 months. None of the companies have submitted their audit reports special 6 months bar for one company which managed to submit their audited report only after 184 days in year 2007. The results in control board 4 tests that most companies reports way ahead the date stipulated by Chapter 9 (9. 3a) of Bursa Malaysia Listing Requirement that the annual report shall be restitutiond and submitted within a period not stupendous 6 months from the financial year end of the company. Such results indicated that the companies are concerned and completed that audited reports are effective for users? 55 Pg7Pg7 decision-making. The results go for the notion that extravagant delay in publishing financial statements would increase precariousness in relation to investment decisions(Ashton et al. 1987 Ahmad and Kamarudin, 2003). card 5 Descriptive statistic for Audit Committee Characteristics and Control VariablesIndependent VariableNMinimumMaximumM eanMedianStd. remainder ACIND8640. 601. 000. 931. 000. 18 ACDIL8641. 0012. 004. 845. 001. 67 ACEXP8640. 001. 000. 400. 330. 19 Control variable SIZE TOTASSET (RM BILLION)8649 -336. 640. 790. 242. 86 TYPEAUD864010. 580. 000. 49 positivity864-1. 8811. 0590. 030. 030. 40 Notes ACINDP= section of non-executive directors to the congeries of audit committee members ACDIL= number of audit committee meeting ACEXP= no of audit committee member with reach experience in financial reporting TOTASSET= total assets that the companies have at the end of the financial year.TYPEAUD= ? 1? if audited by Big-4, ? 0? if otherwise PROFITABILITY= net income separate with total assets dodge 5 presents the characteristics of the audit committee among the listed companies. The results launch that audit committee independence (ACIND) has a mean earn 93 percent. The results also show that the listed companies lower limit score of 60 percent of their audit committee member being equal by independent directors. The results indicate that the companies accept with the Bursa Malaysia lean requirement (2009) which requires a company to have absolute legal age of the audit committee members being ndependent directors. Although the requirement of Bursa Malaysia on the number of independent directors in a board of directors is different from MCCG? s (2007) requirement, the requirement of Bursa Malaysia listing requirement prevails MCCG? s requirements2. carry over 5 also presents the results on the number of meetings held by the audit committee. The results show that almost all audit committee in the listed companies discharge their duties appropriately in which on average 5 meetings were being held.The highest number of meeting held by the audit committee during the three year period was 12 times. MCCG (2007) provides that companies should have their audit committee meeting at least 4 times a year. submit 5 also shows the mean score of audit committee expertise (ACEXP) as 0. 4 ( 40 percent). Such results indicate that most audit committee in the listed companies have audit committee members with experience in financial reporting. Only 24 of the companies (2. 78 percent) organize their audit committee with members not having accounting qualification.The later results did not come after with requirements of Bursa Malaysia listing requirements and MCCG that states at least one member of the audit committee must fulfill the financial expertise requisite. In fact, two companies for the three year period have yet to comply with the requirement to have one of the audit committee members? with financial expertise. 4. 2. correlation ground substance analytic thinking circuit board 6 shows a non- pregnant think of (0. 333) which is more than 0. 05, indicating info normality. base on Kolmogorov-Smirnov and Shapiro Wilk tests, this study concludes that audit report lag is normally distributed. MCCG (2007) provides that, all members of the audit committee shoul d be non-executive directors. 56 Pg8Pg8 Table 6 due north Test for Audit Report Lag Kolmogorov-SmirnovaShapiro-Wilk StatisticdfSig. StatisticdfSig. NARL0. 0348640. 0210. 9988640. 333 a. Lilliefors Significance correction Table 7 shows no correlation coefficient problem among the variables since the order is less than 0. 5. The mutant inflation factor (VIF) indicates all variables have a value below two which is within the bankable range of 10. Table 7 Correlation Matrix Table ARLACDILACINDACEXPLog_AssetTYPEAUDROA ARL1 ACDIL0. 096**1 ACIND-0. 68*0. 0301 ACEXP-0. 0190. 0220. 0131 LOG_ASSET-0. 170**0. 093**0. 078*-0. 0031 TYPE AUD-0. 170**-0. 088**0. 010-0. 0210. 195**1 ROA-0. 076*0. 0330. 029-0. 032-0. 0210. 0061 **Correlation is significant at the 0. 01 train (2-tailed). * Correlation is significant at the 0. 05 take (2-tailed) Notes ACINDP= percentage of non-executive directors to the total of audit committee members ACDIL= number of audit committee meeting ACEXP= no of audit committee member with background experience in financial reporting LOG_ASSET= inbred log of total assets (in billions of ringgit Malaysia) TYPEAUD= ? 1? f audited by Big-4, ? 0? if otherwise ROA= net income split up with total assets 4. 3. set(p) display panel reverse This section presents the results of the fixed panel atavism development Eviews. The panel entropy digest is an increasingly popular form of longitudinal entropy analysis among loving and behavioral wisdom researchers (Hsiao, 2003). A panel is a cross-section(prenominal) or group of people who are surveyed periodically over a given time period. In this study, the group is the listed companies selected and the time is the duration of the information collected, which is the three year period of 2007 until 2009.Since the entropy is bound to be heterogeneity, the panel selective information technique could take such heterogeneity explicitly into account by allowing individual specific variables (Gujarati, 2 003). expression regression does not adjust firm? s specific effect which would lead to variables being omitted and mis-specified the representative (Fraser et al. 2005). Fixed effect model could vote down such problem by adjusting the effect through firm? s specific intercept by capturing immeasurable firm? s specific characteristics (Fraser et al. 2005). add-in information provides more illuminating of entropy, variability and efficiency.Under the panel data, the model is generated as follows ARL = 1ACINDP + 2ACMEET + 3ACEXP + 4SIZE+ 5AUDTYPE + 6PROF + it Table 8 Fixed Panel Regression Result VariableCoefficientProb. ACIND-0. 0217060. 001* ACDIL-0. 0098350. 899 ACEXP-0. 0400840. 001* LOG_ASSET-0. 1297820. 012* ROA-0. 0021460. 264 TYPEAUD0. 0025350. 294 C5. 7867340. 000 N864 57 Pg9Pg9 Table 8 Fixed Panel Regression Result go along set R-squared0. 802562 F-statistic12. 811 Prob(F-statistic)0. 000 Notes ACINDP= percentage of non-executive directors to the total of aud it committee members ACDIL=number of audit committee meetingACEXP= no of audit committee member with background experience in financial reporting LOG_ASSET= natural log of total assets (in billions of ringgit Malaysia) TYPEAUD= ? 1? if audited by Big-4, ? 0? if otherwise ROA= net income divided with total assets Adjusted R2= adjusted R2 coefficient function F stat= indicate how much novelty is explained by the regression equation. *significant at 1%. Table 8 shows that the audit committee independence (ACINDP) and audit committee expertise (ACEXP) are significant at 1% level. Thus, accept hypotheses one and three respectively.On the other hand, the results show that there is no kindred between audit committee diligence and audit report lag. Therefore, hypothesis two is rejected. The results indicate that audit committee independence and audit committee expertise whitethorn reduce on audit report lag but audit committee diligence could not function audit report lag. Carcello et a l. (2000) found that audit committee independence and audit committee expertise have significant relationship with audit fee while audit committee diligence did not provide any relationship on audit fees.The results in this study shows significant relationship between audit independence and audit report lag which is similar to Klein (2002) that found that more independent audit committee members would effectively function financial reporting quality. The results of this study give the view that audit committee with a simple majority of independent audit committee members are more presumable to fulfill its duties effectively compared to an audit committee members that have no independent audit committee members.This is unchanging with agency theory where independent members in an audit committee could assist principals to monitor the agents? activities and reduce benefits from withholding information. They would have had provided more effective roles in monitoring the companies. Further, the number of financial experts on audit committee will reduce incident of hypocrite (Farber, 2005). A member with financial expertise demonstrate a high level of financial reporting knowledge and thus expected to lead the committee, identify and ask knowledgeable questions that altercate management and external auditor (He et al. 009). In practice, it is a general belief that more meeting and discussion of the committee would better the performance of the company. However, similar to the study done by Uzun et al. (2004), the results in this study show that the number of audit committee meeting held is not significantly associated with audit report lag. More frequent meeting that the company has does not of necessity provide conk out achievement to the companies. Thus, the company needs to ensure audit committee member brocaded and stubborn issues with management during the meeting, and as a result improve the quality of reporting. . cultivation The results of this st udy show that audit committee characteristics audit committee independence and audit committee expertise contribute as important factors that fall audit report lag of the companies. Such results correspond to the resource based theory where those characteristics of audit committee as the resources and capabilities that may improve companies? performance as well as on the corporate 58 Pg10Pg10 reporting.These two characteristics represent the Bursa Malaysia listing requirement that require audit committee accumulate of not few than 3 members with majority of them being independent directors and requires at least one member of the audit committee to have financial expertise requisite. Audit committees with those characteristics could assist the companies to be timely in their annual reporting. Finally, this study could not find significant link between audit committee meeting to audit report lag.This study suggests that audit committee could place important things that need to be resolved during the meeting in order to improve the performance of the company as well as in assuring audit report lag. This study is not without limitations. This study does not include other factors such as government policy or political issue that also might affect audit report lag. McGee (2007) say that the influence of timeliness might be attributed by culture, political and economic system of the country.Secondly, covering a bigger sample would provide greater generalization on the Malaysian listed companies on audit report lag and corporate governance characteristics. Finally, this study only covers a three year period from 2007 until 2009. A longer period such as ten year period data would be more interesting as it can show the trend on audit report lag. For future research avenues, a happening is to examine other corporate governance mechanisms characteristics of board of directors in assuring audit report lag.Future research can also examine which parties are liable for the delay of annual report, each on the manpower of the preparers or auditors. References 1 Abdul Rahman, R. and Mohamed Ali F. H. , 2006. ? 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