Corporate Governance and Audit Report Timeliness: Evidence from Middle East and Africa emerging Economies Ahmed F. Elbayoumi1, Ehab K. A. Mohamed2 and Mohamed A. K. Basuony3 Abstract Timeliness is an essential qualitative characteristic of relevant financial information and is therefore getting increased interest from accounting regulators and listing authorities around the world. Timeliness of corporate annual financial reports has a significant importance for users of financial statements. Also, timeliness of financial reporting of companies is considered to be a critical factor that affects the usefulness of information that helps the external users. This paper goes beyond the standard audit report lag studies by incorporating board structure and ownership composition variables into the determinants of financial reporting timeliness. The population of this study comprises of the 240 companies constituting the S&P Mid-East and Africa emerging BMI index. Ordinary Least Square (OLS) regression analysis is performed to test the audit report timeliness determinants. This study is used to examine the effect of board structure, ownership structure, audit type, firm size, leverage and firm profitability on audit report timeliness. The results reveal that there are significant differences for the audit report delay in days among the ten sectors working in the five countries of S&P Mid-East and Africa. A regression analysis indicates that institutional ownership, governmental ownership, auditor type, return on assets, and firm size significantly affect audit report lag. Keywords: Audit Report Timeliness, Profitability, Board Structure, Ownership Composition Audit Type, Firm Size, Middle – East and Africa. 1. Introduction This study examines the effect of corporate governance on the timeliness of financial reporting in the companies constituting the S&P Mid-East and Africa emerging BMI index. More particularly, this paper attempts to assess the effects of ownership structure and board characteristics on the timeliness of financial reporting of firms listed in the stock exchanges of South Africa, Egypt, Morocco, Qatar, and Emirates. The five countries have witnessed a period of high economic growth in the last two decades. New investment opportunities have created the prosperity from the exploitation of natural resources that resulted in increased savings. The huge flow of funds into the

1

Ahmed Elbayoumi, Assistant Professor of Accounting, Department of Accounting, Faculty of Commerce, Cairo University. Email: [email protected] 2

Ehab K. A. Mohamed, Professor of Accounting, Department of Accounting and Finance, Faculty of Management Technology, German University in Cairo. Tel.: +20 2-27590764; Email: [email protected] 3

Corresponding author; Mohamed A. K. Basuony, Associate Professor of Accounting, Department of Accounting, School of Business, American University in Cairo. Email: [email protected]

1

banking system and corporations has led to increased demands from lenders and investors to raise standards of corporate governance (Hussain and Mallin, 2002; Joshi and Wakil, 2004). Meanwhile, to fund growth and to benefit from the globalization of business there has been a need for access to international capital. The five countries aim to have a strong diversified economy based on well-established financial system in order to keep pace with international developments and enable the vision of a solid economy that will be recognized internationally. Thus, effective corporate governance is fundamental to establishing sound financial systems (Mohamed et al., 2009; Saidi, 2011). These countries have taken significant actions to monitor and regulate their capital markets activities in an attempt to improve their stock exchanges in terms of corporate governance. These actions require disclosure and include regulations that enhance shareholder protection and reduce corporate management malpractice (Hawser, 2005; Mohamed et al., 2009; Saidi, 2011; Baydoun et al, 2013). Interest in corporate governance (CG) has grown in the last three decades bringing the term from obscurity to the centre of attention of many academic and professional studies. This interest appears more appropriate at this time, when business executives and auditors are continually being held to higher standards of accountability and responsibility, even though corporate governance issues may be traced back to the nineteenth century with the advent of limited liability incorporation (Vinten, 1998). Corporate governance is viewed as an indispensable element of market discipline (Levitt 1999) and this is fuelling demands for strong corporate governance mechanisms by investors and other financial market participants (Blue Ribbon Committee 1999; Ramsay 2001). The timely disclosure of information is an important pillar of a strong and transparent financial system. Financial markets are based on information and any barriers to the flow of relevant information render the markets weak and inefficient. Timely financial reporting disclosure reduces information asymmetry and enhances equality among investors to access accounting information without the need to search for other sources. Hence, it is associated with less insider trading and lowers uncertainty in investment decisions (Ashtonet al., 1989; Bamber et al., 1993; McLelland and Giroux, 2000; Owusu-Ansah, 2000). Corporate governance can play an important role ensuring the quality and timeliness of the financial reporting process. Previous studies reveal a relation between poor governance and poor financial reporting quality, financial statement fraud, and weak internal controls (Cohen et al., 2004; Mohamed et al., 2013).

2

The importance of timely financial reporting in developing countries is more prevalent than in other countries because financial reports are the only reliable source of information available to investors (Alattar and Al-Khater, 2008, Mohamed et al., 2009; Khasharmeh and Aljifri, 2010; Mohamed and Basuony, 2014). Therefore, this paper provides valuable contribution to the literature by examining the timeliness of financial reporting in the five S&P Mid-East and Africa emerging BMI countries, namely South Africa, Egypt, Morocco, Qatar, and Emirates. The paper goes beyond the traditional focus on company and audit specific factors that influence the timely disclosure of financial statements by examining the effect of the internal corporate governance mechanisms on the timeliness of financial reporting among companies constituting the S&P Mid-East and Africa emerging BMI. The rest of the paper is organised as follows: the following section provides a theoretical background and hypotheses development. The research methodology is provided in section 3, followed by the findings and analysis in section 4; and finally summary & conclusion are provided in section 5. 2. Background and Hypotheses Development 2.1 Background Corporate governance has assumed a central place in the continued effort to sanitize corporate reporting and shore up public confidence in financial markets around the world. The issue seems to revolve around putting the right rules, regulations and incentives in place to ensure transparency and accountability in the management of the affairs of corporate entities (Cadbury, 1992). Traditional finance literature indicates several mechanisms that help solve corporate governance problems (Jensen and Meckling, 1976; Fama, 1980; Fama and Jensen, 1983; Jensen, 1986; Jensen, 1993; Turnbull, 1997). There is a consensus on the classification of corporate governance mechanisms to two categories: internal and external mechanisms. However, there is a dissension on the contents of each category and the effectiveness of each mechanism. Jensen (1993) outlines four basic categories of individual corporate governance mechanisms: (1) legal and regulatory mechanisms; (2) internal control mechanisms; (3) External control mechanisms; and (4) product market competition. While, Shleifer and Vishny (1997) concentrate on: incentive contracts, legal protection for the investors against the managerial self-dealing, and the ownership by large investors; they point out the costs and benefits of each governance mechanism. Meanwhile, 3

Denis and McConnell (2003) use a dual classification of corporate governance mechanisms (they use systems as synonym to mechanisms) as follows: (1) internal governance mechanisms including: boards of directors and ownership structure and (2) external ones including: the takeover market and the legal regulatory system. Despite the existence of different corporate governance structures, the basic building blocks of the structures are similar. They include the existence of a Company, Directors, Accountability and Audit, Directors’ Remuneration, Shareholders and the AGM. Cadbury (1992), Greenbury (1995) and Hampel (1998) called for greater transparency and accountability in areas such as board structure and operation, directors’ contracts and the establishment of board monitoring committees. In addition, they all stressed the importance of the non-executive directors’ monitoring role. The relationship between corporate performance and corporate governance is measured using only one of the two variables: ownership structure and board structure (Krivogorsky, 2006). The agency theory is one of the most influential theoretical considerations underlining corporate governance. It addresses ways to develop an optimal design of a corporation in the context of a conflict of interest between an agent (management), and a principal (shareholders); as some of these decisions are very detrimental to shareholder wealth. The agency theory attempts to describe this relationship in the metaphor of a contract, and is concerned with overcoming two major problems that occur in the context of a ‘Principal-Agent’ relationship. First is the agency problem that arises when both parties have different goals, in addition to the difficulty for the principal to verify what the agent is actually doing. The second problem arises due to different risk attitudes, meaning that the principal and the agent may prefer different courses of actions accordingly (Eisenhardt 1989; Tornyeva and Wereko, 2012). Corporate governance mechanisms can be effective in solving agency problems by facilitating for improved transparency and high quality financial reporting (Beasley, 1996; Kent et al., 2010; Xie et al., 2003; Klein, 2002). A good measure of corporate financial reporting transparency and quality is timeliness. If a corporation issues perfectly accurate but late information, it becomes stale. The more stale information is, the less relevant it is to users (McGee, 2007). Audit report lag, lapse of time between fiscal year end and the date of the audit report, is one of the most common measures of timelines (Davies and Whittred, 1980; Ashton et al. 1989, Bamber et al., 1993; Leventis et al. 2005). Several studies have examined the determinants of AUDIT REPORT LAG in both developed and developing countries (Dyer and McHugh, 1975; Davies and Whittred, 1980; Ashton et al., 1989; 4

Bamber et al., 1993; Owusu-Ansah, 2000; Leventis et al., 2005; Che-Ahmad and Abidin, 2008). Most of these studies focused on firm and audit specific factors; however few studies have examined the effect of corporate governance on the timeliness of financial reporting (El-Bannany, 2008; Afify, 2009; Yaacob and Che-Ahmad, 2012). 2.2 Hypotheses Development Board Size Board size may have a significant effect on directors’ capacity to control and supervise managers (Yap et al., 2011). It is argued that a large board is likely to involve a diversity of expertise (Ezat and El-Masry, 2008). Larger boards my include more independent directors with valuable experience (Appah and Emeh, 2013). Other studies indicated that large board size meetings may be less organized and may reduce the chance of effective communication and participation decreasing the likelihood to reach an agreement and this may result in delaying of important decisions (Ibadin et al., 2012). Some studies found that earnings management and the size of the board of directors are positively related supporting the proposition that larger boards are ineffective in performing their oversight duties compared to smaller boards (Rahman and Ali, 2006). Yap et al. (2011) found that board size is positively significantly related to financial reporting timeliness. Ibadin et al. (2012) assessed the relationship between board size and the timeliness of financial statements and found no significant relationship. Depending on the above argument, the first hypothesis to be tested is: H1. There is significant association between the timeliness of financial reports and board size. Board Independence: Board independence is calculated by dividing the number of outside non-executive directors to the total number of board directors (Haniffa and Cooke, 2002). If the independent directors have the appropriate skills and have no conflict of interest with business, they are considered to be better monitor management compared to inside directors (Ibadin et al., 2012). It is expected that the ability of the board of directors to monitor the management is improved when the number of the independent directors is increased (Afify, 2009). It is argued that strong monitoring may affect the assessed level of inherent and control risks leading to a reduction of the extent of tests of details which, in turn, affect the timing and extent of audit work (Shukeri and Islam, 2012). The second hypothesis to be tested is:

5

H2: There is a significant association between the timeliness of financial report and board independence. CEO Duality: When the CEO is also the chair of the board of directors, role duality exists (Abdelsalam and Street, 2007). The separation of the two roles is recommended by the agency theory (Haniffa and Cooke, 2002) because duality may create conflicts of interests, concentrate decision making power, hinder board independence, and reduce the board’s oversight responsibility (Appah and Emeh, 2013). The separation of the two roles is also recommended by codes on corporate governance to guarantee appropriate checks and balances on the board (Mohamad-Nor et al., 2010). In the case of CEO duality, auditors’ assessments of both control risk and audit risk is more likely to be affected. The rationale behind this argument is that in the case of duality there is more room for fraud and earnings management. In that case, the auditor may need additional time to perform more testing to avoid the risk of audit failure (Peel and Clatworthy, 2001). Empirically, Afify (2009) examined the impact of corporate governance characteristics on audit report lag, and found that CEO duality is significantly related to audit report lag. Thus, it may be expected that CEO duality will be positively correlated with audit report lag (Afify, 2009). While Abdelsalam and Street (2007) found that CEO duality is associated significantly with a less timely corporate reporting, others found an insignificant relationship between the two variable (Ghazali and Weetman, 2006). The contradictory nature of these results supports the need to examine the relationship between reporting timeliness and CEO role duality (Ezat and El-Masry, 2008). The third hypothesis to be tested is: H3. There is a significant association between the timeliness of financial report and CEO duality. Board Diversity: Gender diversity of the board is one of the important topics related to corporate governance enhancement efforts (Adams and Ferreira, 2009). According to the resource dependence theory and human capital theory, the type of board diversity is expected to have a significant effect on the board performance (Carter et al., 2010). Empirical evidence supports the argument that female directors may have different tasks on the board (Carter et al., 2010). Focusing on committee assignments, Peterson and Philpot (2007) studied the roles of female directors of US Fortune 500 firms. They found some relationship between gender, committee assignment, and the resource dependence role of directors. Adams and Ferreira (2009) reported that female directors have a very important effect on board performance. Using a sample of US firms, they found that female directors tend to join monitoring committees and that the attendance records of female directors are better than these of 6

male directors. Adams and Ferreira (2009) argued that female directors may have an impact that is comparable to the effect of the independent directors stated in the governance literature. On the other hand, social psychology theories suggest that because of disagreements among diverse directors of the gender-diverse boards, decision making process may be slower and female directors may have insignificant influence on board decisions (Carter et al., 2010). The sign of the relationship between board diversity and board performance may either be positive or negative. The sign is not clearly supported by the limited amount of empirical evidence (Carter et al., 2010). Hence, the fourth hypothesis to be tested is: H4: There is a significant association between the timeliness of financial report and board diversity. Ownership Concentration According to the agency theory an information asymmetries between managers and dispersed equity shareholders may arise when the management does not own all of the company’s shares. Information asymmetries may lead to a conflict between stock holders and managers (Al-Ajmi, 2008). Audits serve to reduce asymmetric information risk by attesting the reliability of published financial information for existing and prospecting investors. Abdelsalam and Street (2007) think that firms with higher ownership dispersion are expected to supply more timely information. Firms with higher ownership dispersion experience more pressure to disclose their financial information earlier. Thus, the dispersion of ownership is expected to encourage firms to disclose their financial information more quickly and to urge their auditors to issue audit report earlier (Mouna and Anis, 2013). The fifth hypothesis to be tested is: H5: There is a significant association between timeliness of financial report and ownership concentration. Director Ownership In firms with larger director ownership, directors may already have access to the financial information. Therefore, less pressures is imposed by the directors to external auditors. Consequently, it is argued that companies with higher level of director ownership tend to have longer audit report lag (Apadore and Noor, 2013). The sixth hypothesis to be tested is: H6: There is a significant association between the timeliness of financial report and director ownership.

7

Family Ownership It is usually hypothesized that the timeliness of financial reporting varies according to the characteristics of the major shareholder (Lim et al., 2014). Family-owned firms hold long-term lesdiversified investment portfolios. The owners of family-owned firms have greater incentives to protect their wealth, control senior management positions, and have concerns about the firm’s reputation and value (Anderson and Reeb, 2003). The increased transparency and timeliness improve external capital raising potentials. Under this view, family-owned firms are expected to have better timeliness of financial reporting (Lim et al., 2014). In the family-owned firms, the owners have inside information and the auditor exposure is limited to those owners, reducing the auditor’s business risk. The family-owned and controlled companies, therefore, could be expected to have comparatively shorter audit report lag (Jaggi and Tsui, 1999). The seventh hypothesis to be tested is: H7: There is a significant association between timeliness of financial report and family ownership. Institutional Ownership Institutional investors have common characteristics such as large size (Jennings, 2005), greater resources (Shleifer and Vishny, 1994) and financial expertise (Hand, 1990). These characteristics give the institutional owner advantages in monitoring firm’s activities. Institutional owner can enforce the management to work for the benefit of the shareholders through using their voting power (Wu, 2004; Guercio et al., 2008). Lim et al. (2014) argue that large institutional ownership can reduce information asymmetry as the institutional owner can enforce the management to disclose financial information in an appropriate time. The eighth hypothesis to be tested is: H8: There is a significant association between timeliness of financial report and Institutional Ownership. Governmental Ownership When the government is the major shareholder it usually lacks the motivation for effective monitoring (Shleifer and Vishny, 1994). When the government is the major owner, it may try to perform for its own benefit ignoring the minority owners, creating an agency problem (Lim et al., 2014). It is suggested that firms with major government ownership are less exposed to market discipline and corporate governance mechanisms (Johnsona and Mitton, 2003). Thus, it could be argued that the timeliness of financial reporting of government-owned firms is lower. Inconsistent 8

with the last notion, Lim et al. (2014) found that firms with government as the largest shareholder have a substantially shorter reporting lag. The ninth hypothesis to be tested is: H9: There is a significant association between timeliness of financial report and government ownership. Auditor Type According to the signalling theory, managers hire big four auditing firms (Ersnt &Young, Delliotte, KPMG, and PWC) to convey a signal to the market that they are keen to provide quality disclosures (Basuony et al., 2014). Afify (2009) believes that big four audit firms are more motivated to maintain their reputation and name. Thus, they try to submit their report in a timely manner. It is believed that the big four apply well-programmed audit procedures and that they have better access to more advanced resources, technologies, and well trained competent staff (Dibia and Onwuchekwa, 2013; Shukeri and Islam, 2012). Thus, it can be expected that big four audit firms provide a higher quality audit including timely audit reporting to retain their reputation (Al-Ajmi, 2008). The findings of some prior studies reveal a significant relationship between audit type and financial reporting timeliness (Ibadin et al., 2012; Shukeri and Islam, 2012; Türel, 2010). While other studies found no significant relationship between audit type and reporting timeliness (Afify, 2009; Al-Ajmi, 2008; Al-Ghanem and Hegazy, 2011; Dibia and Onwuchekwa, 2013; Ika and Ghazali, 2012). The tenth hypothesis to be tested is: H10: There is a significant association between timeliness of financial report and auditor type. Industry Type Signalling theory states that companies belong to the same industry are likely to apply the same level of disclosure (Basuony et al., 2014). One industry may be involved in complex process while others may not (Afify, 2009). The adoption of complex industry-related accounting techniques and policies may cause financial reporting lag (Afify, 2009). Banks generally have highly centralized and automated accounting systems. Banks also hold fewer non-financial assets (inventory, property, plant, and equipments) compared to manufacturing companies. Manufacturing companies have various transactions, and also have larger levels of non-financial assets compared to banks (Bamber et al., 1993). The financial assets are more easy to audit compared to non-financial assets (Afify, 2009). Hence, some believe that auditing banks accounts is likely to involve fewer time than auditing manufacturing companies (Bamber et al., 1993). Some industries are more regulated than others (Al-Ajmi, 2008). Financial companies are required to follow more enforceable regulations 9

and mechanisms, which may improve the timeliness of the financial reporting (Al-Ajmi, 2008). Many studies found that industry type affects audit report lag/financial reporting timeliness (Afify, 2009; Ezat and El-Masry, 2008; Pourali et al., 2013). Other studies concluded that industry classification have no significant correlation with audit delays (Al-Ghanem and Hegazy, 2011). Many studied concluded that the audit delay in the banking sector is less than in other sectors (AlAjmi, 2008; Ashton et al., 1989; Ika and Ghazali, 2012; Khasharmeh and Aljifri, 2010). Türel (2010) indicated that the companies that are operating in manufacturing industry are late reporters. The eleventh hypothesis to be tested is: H11: There is a significant association between timeliness of financial report and industry type. Firm Profitability It is suggested that firm profitability can be regarded as an indicator of good management (Basuony et al., 2014). Thus, in firms that have profit, the management may be encouraged to communicate good news to their shareholders. Thus the management may persuade the auditor to issue his/her report in a shorter period (Shukeri and Islam, 2012). This behaviour can be explained by the agency theory. According to the agency theory, managers of profitable companies are more eager to disclose more and timely information to realize personal benefits such as promotions (Haniffa and Cooke, 2002). On the other hand, Firms experiencing losses (bad news) usually avoid disclosing the bad news that may crack the firm’s reputation. Thus, firms experiencing losses tend to delay their financial statement. furthermore, because of the audit business risk associated with losing firms, auditor may need more time to issue the audit opinion (Afify, 2009). Empirically, Pourali et al. (2013) found a significant negative association between audit delay and changes percent in earnings per share (as measure of firm profitability). Ibadin et al. (2012) tested for the association between profitability and the timeliness of financial statements. The study did not find statistically significant association between the two variables. The twelfth hypothesis to be tested is: H12: There is a significant association between timeliness of financial report and firm profitability. Leverage It is very common that large company depend on loans to finance its operations. When the amount of the debt increases, the firm become more exposed to its creditors. In that case, creditors (especially institutional creditors) may need to get the audited financial statements due to monitor the company’s use of debt (Ibadin et al., 2012). Thus, with the objective of retaining creditors 10

confidence about their ability to pay debts, it is expected that companies with higher leverage ratio will try to fulfil the creditors’ need by disclosing reliable and timely information (Ezat and ElMasry, 2008). Empirical results in this regard are mixed. Some studies found no significant relationship between reporting timeliness and leverage (Banimahd et al., 2012; Ibadin et al., 2012; Fagbemi and Uadiale, 2011; Pourali et al., 2013; Mouna and Anis, 2013). Other studies found that highly leveraged firms tend to postpone their financial reports as well as to have a longer audit lag period (Al-Ajmi, 2008). Al-Ghanem and Hegazy (2011) reported that leverage is negatively correlated with audit delay. The thirteenth hypothesis to be tested is: H13: There is a significant association between timeliness of financial report and leverage. Firm Size It is argued that large companies tend to disclose more information as a reaction to stock market pressure. Large companies depend on the stock market to raise fund (Basuony et al., 2014). Larger companies tend to have more effective internal controls making external auditing much easier. Managements of larger companies may have incentives to report the financial information in a timely manner as they are closely monitored by the investors and regulating agencies (Pourali et al., 2013). Also larger companies usually have enough resources to pay higher audit fees, encouraging the external auditor to issue his/her report soon after the companies’ year-end (Shukeri and Islam, 2012). Pourali et al. (2013) found that there is a strong and positive relationship between audit delay and company size. Fagbemi and Uadiale (2011) found a negative and significant relationship association between timeliness of financial reports and company size in Nigeria. Ezat and El-Masry (2008) found that company size is positively and significantly associated with corporate internet disclosure timeliness. Mouna and Anis (2013) found that the coefficient of the firm’s size was insignificant providing evidence against the effect of firm size on the timeliness of the annual reports. Ibadin et al. (2012) tested the association between company size and the timeliness of financial statements and found no association between the two variables. The fourteenth hypothesis to be tested is: H14: There is a significant association between timeliness of financial report and firm size. 3. Methodology The aim of this study is to examine the determinants of audit report timelines by companies that constitute the S&P Middle East and Africa BMI index. The research methodology employed to 11

omplish thiis aim is presented in this t sectionn. The popuulation of thhe study con nsists of firrms that acco connstitute the S&P S Middlle East and Africa BM MI index. Daata is colleccted for 201 13 as it is th he most receent year for which com mpany annuaal reports arre available for the sam mple at the time of undeertaking thiss research. Table T (1) and figure (1) show thee sample diistribution bby country.. Three firm ms were excluded from the samplee due to the lack of dataa needed to measure coorporate gov vernance vaariables. f (2) below b show the samplee distribution by sectors. Table (3)) shows the sample Tabble (2) and figure disttribution by sectors witthin each coountry. Table (11) Sample D Distributionn by Countryy Sampple N of Firm No. ms % South Africa 139 58% Egypt 29 12% Moroccco 12 5% Qatar 27 11% Emirattes 31 13% Tootal 238 100% Figure (11): Sample D Distributionn by Countrry Number of Firms

Couuntry

150 0

139

100 0 29

50 0

12

31

27

0 South  Africa

Egypt

Morocco

Qatar

Em mirates

Country

Table (2): ( Sample Distribution by Sectorr Secctor No. of Firms Eneergy 7 Matterials 34 Induustrials 33 Connsumer Disccretionary 26 Connsumer Stapples 24 Heaalth Care 8 Finaancials 91 Infoormation Teechnology 4 Teleecommunication Servicces 9 Utillities 2 Tootal 238

% 3% 14% 14% 11% 10% 3% 38% 2% 4% 1% 100% 12

Number of Firms

Figure (2): ( Samplee Distributio on by Sectorr 100 90 80 70 60 50 40 30 20 10 0

91

34

33

26

24 8

7

4

9

2

Sector

Table (3) ( Sample Distribution n by Sectorrs within eacch Country Seector Enne. Maat. Indd. CD D CS S HC C Finn. IT Teele. Uttil. Tootal

Souuth Africa Egypt Moroocco Qatar Emirates Tootal Firm ms % Firms F % Firms % Firm ms % Firms % Firms % 3 2% 1 3% % 0 0% 2 7% 1 3% % 7 3% 24 17% 4 14% % 4 33% 2 7% 0 0% % 34 14% 20 14% 1 3% % 0 0% 5 19% 7 23% 33 14% 22 16% 4 14% % 0 0% 0 0% 0 0% % 26 11% 18 13% 2 7% % 1 8% 2 7% 1 3% % 24 10% 6 4% 0 0% % 0 0% 1 4% 1 3% % 8 3% 39 28% 14 48% % 5 42% 122 44% 21 68% 91 38% 4 3% 0 0% % 0 0% 0 0% 0 0% % 4 2% 3 2% 3 10% % 1 8% 2 7% 0 0% % 9 4% 0 0% 0 0% % 1 8% 1 4% 0 0% % 2 1% 1399 100% 29 100% % 12 100% 277 100% 31 100 0% 238 100%

Notee: Ene. refers to Energy; Mat. refers to Materials; M Ind. refers to Induustrials; CD reefers to Consuumer Discretioonary; CS referrs to Consum mer Staples; HC H refers to Health H Care; F Fin. refers to Financials; F IT T refers to Infformation Tecchnology; Telee. refers to Tellecommunicattion; and Util refers to Utiliities.

Thee sample off this study consists off 238 firms from five countries c (S South Africaa, Egypt, Morocco, M Qattar, and Emiirates) divid ded into 10 sectors wheere there aree 71 manufaacturing firm ms which reepresent abo out (30%) off the total sample s and 167 servicees firms thaat have abouut (70%) off the samplee in this stud dy. Table (44) and figuree (3) below divided thee sample intto manufactturing and services s firm ms. 4): Sample Distribution D n by Industryy Table (4 Industrry Type Manufaacturing Servicees To otal

N of Firm No. ms 71 167 238

% 30% 70% 100%

13

Figure (3 3): Sample Distribution D n by Industrry

71, 30%

167, 70% 1

Manufactu uring Services

t firms’ annnual reporrts, company y websites and a websitees of the Datta for this sttudy is colleected from the stocck exchangees. This study examinees the effectt of board structure, s ow wnership strructure and d control variiables on au udit report lag. Nine corporate c goovernance variables v annd five conttrol variables were used d. Table (5)) shows thee definition and measurrement of th hese variables. The dep pendent varriable is aud dit report lag g while, thee independeent variablees are divid ded into twoo groups representing the two maiin corporatee governancce variables (board strructure and d ownership p structure) and some control variiables. SPSS S statistical package (v version 19) is i used to an nalyze the ddata. nd Measurem ment of Varriables Taable (5): Definition an Variable V Symbol S Dependent Variaables ARL L

Defiinition

A Audit Report Lag

Indeependent Varriables (Board Structure) BrdD Div B Board Diversiity Duality

C CEO Duality

Brdssize

B Board Size

BrdIIndp

B Board Independence

Measu urement

The num mber of days between the coompany’s finan ncial year end d and the date of th he audit reporrt. Female iin board = 1; No N female in bboard = 0 Duality: If the CEO an nd Chairman aare the same person p = 0; If otherwisse = 1 Total num mber of board d members Total num mber of indep pendent directtors divided by y total numberr of board meembers

Indeependent Varriables (Ownership Structture) DirO Own D Director Own nership Owner M Manager = 1; Hired H Manageer = 0 Adding up u all share raatios of sharehholders of the company who o have Own nCon O Ownership Co oncentration 5% or more m (excluding g others) InstO Own IInstitutional Ownership O Institutio onal ownership p = 1; otherwiise = 0 Gov vOwn G Governmentaal Ownership Governm mental ownersship = 1; otherrwise = 0 Fam mOwn F Family Owneership Family ownership o = 1; otherwise = 0 Con ntrol Variablees T The amount of o return on ROA A Net Incoome divided by y average totaal assets ttotal assets T The amount of o return on ROE E Net Incoome divided by y average totaal equity ttotal equity FrmSize F Firm Size Natural llog of total asssets Aud dtyp A Auditor Type Big 4 = 1; 1 Non big 4 = 0 Lvg L Leverage Total liab bilities divided by total asseets

14

4. Findings and Analysis 4.1 Descriptive Analysis Table (6) illustrates the minimum, maximum, mean and standard deviation values for audit report lag as a dependent variable (Panel A), board structure (BS) and ownership structure (OS) as independent variables (Panel B and C) and the control variables (Panel D). Table (6): Descriptive Statistics Min.

Max

Mean

Std. Deviation

69.19

29.665

.63 .50 10.40 .603 6.31

.484 .501 3.078 .2246 2.957

1 1 1 1 1

.55 .556 .94 .58 .11

.499 .266 .244 .495 .318

5 2 55 .456 .913 26.507 1 1.152

2.08 1.70 30.55 .0696 .1708 19.064 .86 .522

1.504 .458 11.134 .096 .269 3.932 .346 .242

Panel (A): Dependent variables ARL

15

179

Panel (B): Independent variables (BS) BrdDivrsty Duality BrdSize BrdIndp IndpDir

0 0 4 0 0

1 1 21 1 15

Panel (C): Independent variables (OS) DirOwn OwnCon InstOwn GovOwn FamOwn

0 0 0 0 0

Panel (D): Control variables Country IndTyp Sector ROA ROE FirmSize AudType LVG

1 1 10 -.3735 -2.466 10.928 0 .002

The 238 firms are classified into four categories according to the audit report delay in days. The first category includes 17 firms (7%) that have delay less than or equal to 30 days. The second category includes 87 firms (37%) that have delay from 30 to 60 days. The third category includes 91 firms (38%) that have delay from 30 to 60 days. Finally, the last category includes 43 firms (18%) that have delay for more than 90 days. Table (7) shows the audit report delay in days for the whole sample distributed by country, while Table (8) shows the audit report delay in days for the whole sample distributed by sector. 15

Table (7) Audit Report Delay in Days Distributed by Country1 ARL in Days 0 - 30

31 – 60

61 – 90

> 90 Total

S. Africa

Egypt

Morocco

Qatar

Emirates

Total

2 (1%) <1%> 54 (39%) <23%> 56 (40%) <24%> 27 (19%) <11%> 139

0 (0%) <0%> 5 (17%) <2%> 15 (52%) <6%> 9 (31%) <4%> 29

0 (0%) <0%> 2 (17%) <1%> 5 (42%) <2%> 5 (42%) <2%> 12

6 (22%) <3%> 16 (59%) <7%> 4 (15%) <2%> 1 (4%) <0%> 27

9 (29%) <4%> 10 (32%) <4%> 11 (35%) <5%> 1 (3%) <0%> 31

17 (7%) <7%> 87 (37%) <37%> 91 (38%) <38%> 43 (18%) <18%> 238

Table (8) Audit Report Delay in Days (%) Distributed by Sector2 ARL in Days 0 - 30

31 – 60

61 – 90

> 90 Total

Ene.

Mat.

Ind.

CD

CS

0 0 2 0 0 (0%) (0%) (6%) (0%) (0%) <0%> <0%> <1%> <0%> <0%> 3 10 12 6 15 (43%) (29%) (36%) (23%) (63%) <1%> <4%> <5%> <3%> <6%> 2 14 13 15 6 (29%) (41%) (39%) (58%) (25%) <1%> <6%> <5%> <6%> <3%> 2 10 6 5 3 (29%) (29%) (18%) (19%) (13%) <1%> <4%> <3%> <2%> <1%> 7 34 33 26 24

HC

Fin.

IT

Tele

Util.

Total

0 15 0 0 0 17 (0%) (16%) (0%) (0%) (0%) (7%) <0%> <6%> <0%> <0%> <0%> <7%> 7 32 0 1 1 87 (88%) (35%) (0%) (11%) (50%) (37%) <3%> <13%> <0%> <0%> <0%> <37%> 0 32 1 7 1 91 (0%) (35%) (25%) (78%) (50%) (38%) <0%> <13%> <0%> <3%> <0%> <38%> 1 12 3 1 0 43 (13%) (13%) (75%) (11%) (0%) (18%) <0%> <5%> <1%> <0%> <0%> <18%> 8 91 4 9 2 238

Note: Ene. refers to Energy; Mat. refers to Materials; Ind. refers to Industrials; CD refers to Consumer Discretionary; CS refers to Consumer Staples; HC refers to Health Care; Fin. refers to Financials; IT refers to Information Technology; Tele. refers to Telecommunication; and Util refers to Utilities.

Analysing the audit report delay for each country reveals that 9 firms from Emirates (about 4% of the whole sample and 29% of the Emirati firms) are submitting their audit report in less than 30 days which is consider the best country in audit report timeliness. On the other hand, 27 firms from South Africa (about 11% the whole sample) are submitting their audit report in more than 90 days. It worth 1

The numbers appearing between brackets is the result of dividing the number of firms by the total number of firms in each country. While the numbers appearing between angled brackets is the result of dividing the number of firms by the total sample (238 firms).

2

The numbers appearing between brackets is the result of dividing the number of firms by the total number of firms in each sector. While the numbers appearing between angled brackets is the result of dividing the number of firms by the total sample (238 firms).

16

om Morocco o (about 2% % the wholee sample) thhat submit their t audit report r in notiing that the 5 firms fro morre than 90 ddays represeent 42% of all a firms of Morocco. Tab ble (8) reveaals that 15 firms f from the t financiaal sector (ab bout 6% of the whole sample s and 16% of the financial fiirms) are su ubmitting th heir audit reeport in lesss than 30 daays which is i consider the t best t same tim me, 12 firm ms from the financial seector (abou ut 5% of secttor in audit report timeeliness. At the the whole sam mple and 13% % of the fin nancial firm ms) are subm mitting theirr audit repo ort in more than 90 ys. Table (8)) shows thaat 3 firms frrom the infformation teechnology ssector (abou ut 1% of thee whole day sam mple and 75% % of the infformation teechnology firms) f subm mit their audit report in more m than 90 9 days. Tab ble (9) and figure f (4) su ummarize th he average audit a reportt delay in daays for each h country wh here the low west averagee delay of alll countries is noticed iin Qatar (47 7 days) whille the higheest average delay is notiiced in Egyp pt (86 days)). Tablee (9): Averag ge Audit Reeport Delay y in Days peer Country Country

ARL in Days

South h Africa

73

Egypt

86

Moro occo

83

Qatarr

47

Emiraates 52 Figuree (4): Averaage Audit Report R Delay y in Days peer Country

Days

86 90 0 80 0 70 0 60 0 50 0 40 0 30 0 20 0 10 0 0

83

73 3 47

South Afrrica

Eggypt

Morocco

Qatar

52

Emirates

C Country

Tab ble (10) andd figure (5)) summarizze the averaage audit reeport delay in days fo or each secttor. The averrage delay in i the health h care secto or is 58 dayss representiing the loweest average delay of alll sectors whiile the higheest average delay is notticed in the sector of in nformation ttechnology with 106 daays. 17

Tablee (10): Averrage Audit R Report Delaay in Days pper Sector Seector Energy E M Materials Inndustrials C Consumer Disscretionary C Consumer Staaples H Health Care Financials Innformation Technology T T Telecommuni ication Serviices U Utilities

Averrage Audit R Report D Delay in Dayys 73 76 74 81 63 58 62 106 73 70

Days

Figurre (5): Averrage Audit Report R Delaay in Days pper Sector 120 100 80 60 40 20 0

73 3

76

81

74

6 106 63

62

58

73

70

Sector

nufacturing and a services firms, the average au udit report delay d for By classifying these sectors into man 8.8 and 69.4 4 days respeectively). Taable (11) an nd figure (6 6) below the two categories is nearlly equal (68 ws the averrage audit reeport delay in days for each group. show Table (11) Average Audit Repoort Delay in n Days by Inndustry Typ pe Inddustry Manuffacturing Servicces

Average Auudit Report Delay in n Days 68.8 69.4

Days

Figure (6 6) Average Audit Repo ort Delay in n Days by Inndustry Typ pe

100 80 60 40 20 0

69.4

68.8

Maanufacturing

Seervices

ndustry In

18

Table (12) and figure (7) report the frequencies of the corporate governance dummy variables used in this study assigned to the samples’ countries, while Table (13) and figure (8) report the frequencies of the corporate governance dummy variables assigned to the samples’ sectors. The two tables show auditor type statistics based on “big 4” and “non-big4” audit firms. The mean is 0.86 where standard deviation is 0.346 as reported in Table (6). The frequency for big 4 is 86% while for the non-big 4 is 14%. This means that most of the firms in the sample depend on the big4 audit firms. As illustrated by these tables, the percentage of CEO duality is equal to the percentage of no duality. Statistics based on whether the firm has “female on board” or “no female on board” are reported in the two tables (the mean is 0.63 where standard deviation is 0.484). The frequency for female on board is 63% while for the no female on board is 37%. The percentage of director ownership is 55% with a mean of 0.55 and a standard deviation of 0.499. Firms with family ownership only represent 11% while the firms with no family ownership represent 89%. The standard deviation of the family ownership variable is 0.318. There is a huge gap between the two percentages with the percentage of institutional ownership being 94% while the percentage of firms with no institutional ownership is 6% only. The standard deviation of the institutional ownership is 0.244. There are 137 firms with governmental ownership (58%) compared to 101 firms with no governmental ownership (42%). The standard deviation of the governmental ownership is 0.495. Table (12) reports that 100% of the Qatari firms are audit by the “big 4” firms and 52% of the Egyptian firms are audited by “big 4” firms. CEO duality is observed in 67% of the Qatari firms while it is observed in only 29% of the Emirati firms. 91% of the South African firms have females in their board of directors compared to only 6% of Emirati firms with females in their board of directors. Director ownership is observed in 69% of the South African firms while the same incident is observed in only 17% of the firms from Morocco. Egyptian firms are highly ranked regarding to family ownership (28%). All firms (100%) in all countries except Morocco have institutional ownership. 72% of the South African firms are partly owned by the government. Government ownership is observed in only 17% of the firms from Morocco. Table (13) reports that 100% of the energy sector’s firms is audited by a “big 4” firm, while only 50% the information technology sector’s firms is audited by a “big 4” firm. CEO duality is observed in 75% of the information technology sector’s firms compared to only 22% in the telecommunication sector’s firms. All information technology sector’s firms have females in their board of directors while no females are observed in the utilities firms. Information technology sector 19

is the sector with the highest director ownership ratio (75%) whereas the utilities sector is the sector with the lowest director ownership ratio (0%). 29% of energy sector’s firms have family ownership. No family ownership is observed in the information technology, telecommunication, and utilities sectors. Institutional ownership is highly observed in all sectors (ranging from 71% to 100%). Government ownership is observed in 100% of the information technology sector while there is no evidence of government ownership in the utilities sector. Table (14) reports audit report lag for the whole sample assign to the corporate governance dummy variables. The table reveals that all the firms that have audit report lag of 30 days or less (17 firms) are audited by “big 4” auditor which represents about 7% of the whole sample and 8% of all the firms audited by a “big 4” firm (205 firms). 14 firms out of 17 the firms with the lowest audit report lag have female in their board of directors. As noted from table (14), the number of firms with CEO duality that has less than 30 days delay is 7 compared to 10 with no duality. There are only 4 firms with director ownership and less than 30 days audit report delay compared to 13 firms with no director ownership. The frequency of institutional ownership is illustrated in Table (14). This is also reflected in the audit report delay in different categories of days as shown in the same table. There are 14 firms with institutional ownership and less than 30 days audit report delay compared to 3 firms with no institutional ownership. This large difference is carried out through the table for all categories of days. There are 11 firms with governmental ownership and less than 30 days audit report delay compared to 6 firms with no governmental ownership. Family ownership firms represent almost 11% of the total number of firms in the sample this percentage is reflected in the audit report delay in less than 30 days and more than 90 days categories as shown in table (14). The other categories of days increase the gap between the firms of family ownership compared to firms with no family ownership keeping the number of firms with family ownership always higher. Table (15) depicts the number firms that have audit report lag of 30 days or less for each country assigned to the corporate governance dummy variables. Figure (9) shows the number firms that have audit report lag of 30 days or less. Table (16) depicts the number firms that have audit report lag of more than 90 days for each country assigned to the corporate governance dummy variables. Figure (10) shows the number firms that have audit report lag of more than 90 days assigned to the corporate governance dummy variables used in this study. Table (17) depicts the number firms that have audit report lag of 30 days or less for each sector assigned to the corporate governance dummy variable used in this study. Table (18) depicts the number firms that have audit report lag of more than 90 days for each sector assigned to the corporate governance dummy variables. 20

o the Corporate Governance Du ummy Variables per Country Table (122): Frequencies of Variable V

South Africa (139 Firm ms) Firms % 123 88 8% 16 12 2% 70 50 0% 69 50 0% 126 91% 13 9% % 96 69 9% 43 31% 12 9% % 127 91% 139 100 0% 0 0% % 100 72 2% 39 28 8%

Condiition

Au uditor Typ pe CE EO Duality Fem males in Board B Dirrector Ow wnership Fam mily Ow wnership Institutional Ow wnership Government Ow wnership

Big g4 Non-B Big 4 Yees No o Yees No o Yees No o Yees No o Yees No o Yees No o

Egypt (29 Firms) Firms % 15 52% % 14 48% % 18 62% % 11 38% % 11 38% % 18 62% % 17 59% % 12 41% % 8 28% % 21 72% % 29 100% % 0 0% 9 31% % 20 69% %

Morocco (12 Firms) Firms % 10 83% 2 17% 4 33% 8 67% 6 50% 6 50% 2 17% 10 83% 1 8% 11 92% 12 100% 0 0% 2 17% 10 83%

Qatar (27 Firms) Firms % 27 100% 0 0% 18 67% 9 33% 5 19% 22 81% 6 22% 21 78% 2 7% 25 93% 12 44% 15 56% 8 30% 19 70%

Emirates (31 Firms) F Firms % 30 97% 1 3% 9 29% 22 71% 2 6% 29 94% 9 29% 22 71% 4 13% 27 87% 31 100% 0 0% 18 58% 13 42%

Alll Countries (2238 Firms) Tootal % 2 205 86% 3 33 14% 119 50% 119 50% 150 63% 8 88 37% 130 55% 108 45% 2 27 11% 2 211 89% 2 223 94% 1 15 6% 137 58% 101 42%

Figure (7)): Frequencies of o the Corporate Governance Dum mmy Variables per Country 139

140

127

126

1 123

No. of Firms

120

100

9 96

100 7 70

80

69

60 40 20

43 2730 15 10

201

4

652

South Africa

Egypt

22

18 18

1614

29 18 22 13 6

9

11 8 9

11

17

9 26

2122 1210

1 8 12

124

27 21 25 11

29

39

31 18

15

1212 000

9 0

2

8

20 19 10 13

0

Morocco

Qaatar

Emirates

21 1

G Dum mmy Variables per p Sector Table (133) Frequencies off the Corporate Governance Ene. Mat. Ind. CD. CS. HC C. Fin. IT Tele. Uttil. All Sectorrs (7 7 Firms) (34 Firm ms) (33 Firms) (26 Firms) (24 4 Firms) (8 Firms) (91 Firms) (4 Firms) ( Firms) (9 (2 Fiirms) (238 Firm ms) No. % No. % No. % No. % No. % No. % No. % No. % N No. % No. % No. % Big 4 7 100% 31 91% 9 28 85% 22 85% 23 96% 7 88% 76 84% 2 50% 8 89% 1 50% 205 86% % Auditor Type Non-Big 4 0 0% 3 9% 9 5 15% 4 15% 1 4% 1 13% 15 16% 2 50% 1 11% 1 50% 33 14% % Yes 2 29% 17 50% 5 20 61% 13 50% 12 50% 4 50% 45 49% 3 75% 2 22% 1 50% 119 50% % CEO Duality No 5 71% 17 50% 5 13 39% 13 50% 12 50% 4 50% 46 51% 1 25% 7 78% 1 50% 119 50% % Yes 6 86% 26 76% 7 17 52% 21 81% 21 88% 6 75% 45 49% 4 100% 4 44% 0 0% 150 63% % Females in Board No 1 14% 8 24% 2 16 48% 5 19% 3 13% 2 2 25% 46 51% 0 0% 5 56% 2 100% 88 37% % Yes 3 43% 16 47% 4 24 73% 15 58% 15 63% 5 63% 47 52% 3 75% 2 22% 0 0% 130 55% % Director Ownership No 4 57% 18 53% 5 9 27% 11 42% 9 38% 3 38% 44 48% 1 25% 7 78% 2 100% 108 45% % Yes 2 29% 1 3% 3 4 12% 3 12% 2 8% 1 13% 14 15% 0 0% 0 0% 0 0% 27 11% % Family Ownership No 5 71% 33 97% 9 29 88% 23 88% 22 92% 7 88% 77 85% 4 100% 9 100% 2 100% 211 89% % Yes 5 71% 33 97% 9 31 94% 26 100% 22 92% 8 1 100% 83 91% 4 100% 9 100% 2 100% 223 94% % Institutional Ownership No 2 29% 1 3% 3 2 6% 0 0% 2 8% 0 0% 8 9% 0 0% 0 0% 0 0% 15 6% % Yes 3 43% 20 59% 5 24 73% 13 50% 17 71% 5 63% 45 49% 4 100% 6 67% 0 0% 137 58% % Government Ownership No 4 57% 14 41% 4 9 27% 13 50% 7 29% 3 38% 46 51% 0 0% 3 33% 2 100% 101 42% % N Note: Ene. refers to o Energy; Mat. referrs to Materials; Ind d. refers to Industriaals; CD refers to Co onsumer Discretion nary; CS refers to Consumer C Staples; HC H refers tto Health Care; Fin.. refers to Financials; IT refers to Inforrmation Technologyy; Tele. refers to Teelecommunication; and a Util refers to Utilities. U Variable

Condition

No. of Firms

Figure (8)) Frequencies off the Corporate Governance G Dum mmy Variables per p Sector 90 80 70 60 50 40 30 20 10 0

Ene.

Matt.

Ind.

CD.

CS.

HC.

Fin.

IT

Tele.

Util.

22 2

Table (14) Audit Report Lag per Corporate Governance Variable Audit Report All Auditor Delay Sample Type in Days Firms Big 4 Non-Big 4 17 17 0 0 - 30 (7%) (8%) (0%) 87 79 8 31 - 60 (37%) (39%) (24%) 91 77 14 61 - 90 (38%) (38%) (42%) 43 32 11 > 90 (18%) (16%) (33%) 238 205 33 Total (100%) (100%) (100%)

Female CEO Director Institutional Government Family on Board Duality Ownership Ownership Ownership Ownership Yes No Yes No Yes No Yes No Yes No Yes No 3 14 7 10 4 13 14 3 11 6 2 15 (2%) (16%) (6%) (8%) (3%) (12%) (6%) (20%) (8%) (6%) (7%) (7%) 60 27 41 46 42 45 78 9 53 34 9 78 (40%) (31%) (34%) (39%) (32%) (42%) (35%) (60%) (39%) (34%) (33%) (37%) 60 31 46 45 57 34 89 2 55 36 11 80 (40%) (35%) (39%) (38%) (44%) (31%) (40%) (13%) (40%) (36%) (41%) (38%) 27 16 25 18 27 16 42 1 18 25 5 38 (18%) (18%) (21%) (15%) (21%) (15%) (19%) (7%) (13%) (25%) (19%) (18%) 150 88 119 119 130 108 223 15 137 101 27 211 (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%)

23

udit Report Lag of o 30 Days or Leess per Country and per Corporaate Governance Variables V Table (155) Firms with Au Countries

No.

Auditor

Female

CEO O

Dirrector

Insstitutional

Government

Family

of

Type

on Board d

Dualiity

Own nership

O Ownership

Ownership

Ownership

Sample Big B 4 Non-Big g4 Yes No N Yes No Yes No Yess No Y Yes No Yes No 2 0 2 0 2 0 2 0 2 0 1 1 0 2 2 South Afr frica (12%) (12%) ( (0%) (67%) (0 0%) (29%) (0%) (50%) (0%) (14% %) (0%) (9 9%) (17%) (0%) (13%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Egyptt (0%) (0%) (0%) (0%) (0 0%) (0%) (0%) (0%) (0%) (0% %) (0%) (0 0%) (0%) (0%) (0%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Moroccco (0%) (0%) (0%) (0%) (0 0%) (0%) (0%) (0%) (0%) (0% %) (0%) (0 0%) (0%) (0%) (0%) 6 6 0 0 6 4 2 1 5 3 3 2 4 1 5 Qatarr (35%) (35%) ( (0%) (0%) (43%) (57%) (20%) (25%) (38%) (21% %) (100%) (1 18%) (67%) (50%) (33%) 9 9 0 1 8 1 8 1 8 9 0 8 1 1 8 Emiratees (53%) (53%) ( (0%) (33%) (57 7%) (14%) (80%) (25%) (62%) (64% %) (0%) (7 73%) (17%) (50%) (53%) 17 17 0 3 14 1 7 10 4 13 14 3 11 6 2 15 Total (100%) (1 100%) (0%) (100%) (10 00%) (100%) ((100%) (100%) (100%) (100% %) (100%) (10 00%) (100%) (100%) (100%))

No. Firms N off Fi

Figure (9)) Firms with Au udit Report Lag of o 30 Days or Leess per Corporate Governance Variables V 18 16 14 12 10 8 6 4 2 0

17 14

13

15

1 14 11

10 7 3

6 4

3

2

0

24 4

udit Report Lag of o More than 90 0 Days per Counttry and per Corp porate Governan nce Variable Table (166) Firms with Au Countries

South Afr frica Egyptt Moroccco Qatarr Emiratees Total

No.

Auditor

Female

CEO O

Dirrector

Insstitutional

Government

Family

of

Type

on Board d

Dualiity

Own nership

O Ownership

Ownership

Ownership

Sample 27

Big B 4 20

Non-Big g4 7

Yes 23

No N 4

Yes 16

No 11

Yes 20

No 7

Yess 27

No 0

Yes Y 14

No 13

Yes 2

No 25

(63%) 9

(63%) ( 5

(64%) 4

(85%) 1

(25%) 8

(64%) 6

(61%) 3

(74%) 6

(44%) 3

(64% %) 9

(0%) 0

(7 78%) 2

(52%) 7

(40%) 3

(66%) 6

(21%) 5

(16%) ( 5

(36%) 0

(4%) 2

(50 0%) 3

(24%) 2

(17%) 3

(22%) 1

(19%) 4

(21% %) 5

(0%) 0

(1 11%) 1

(28%) 4

(60%) 0

(16%) 5

(12%) 1 (2%) 1

(16%) ( 1 (3%) 1

(0%) 0 (0%) 0

(7%) 1 (4%) 0

(19%) 0 (0 0%) 1

(8%) 1 (4%) 0

(17%) 0 (0%) 1

(4%) 0 (0%) 0

(25%) 1 (6%) 1

(12% %) 0 (0% %) 1

(0%) 1 (100%) 0

(6 6%) 1 (6 6%) 0

(16%) 0 (0%) 1

(0%) 0 (0%) 0

(13%) 1 (3%) 1

(2%) 43

(3%) 32

(0%) 11

(0%) 27

(6 6%) 16 1

(0%) 25

(6%) 18

(0%) 27

(6%) 16

(2% %) 42

(0%) 1

(0 0%) 18

(4%) 25

(0%) 5

(3%) 38

(100%) (1 100%)

(100%))

(100%) (10 00%) (100%) (100%) ( (100%) (100%) (100% %) (100%) (10 00%) (100%) (100%) (100%))

Figure (10 0) Firms with Audit A Report Lag of More than 90 0 Days per Corpporate Governance Variables

No. of Firms

4 42 45 40 35 30 25 20 15 10 5 0

32

27 11

25 16

38

27 18

25 18

16 1

5

25 5

Table (17) Firms with Audit Report Lag of 30 Days or Less per Sector and per Corporate Governance Variables No. Auditor Female CEO Director Institutional Government Family of Type on Board Duality Ownership Ownership Ownership Ownership Sample Big 4 Non-Big 4 Yes No Yes No Yes No Yes No Yes No Yes No 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Ene. (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Mat. (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 2 2 0 0 2 2 0 1 1 2 0 1 1 0 2 Ind. (12%) (12%) (0%) (0%) (14%) (29%) (0%) (25%) (8%) (14%) (0%) (9%) (17%) (0%) (13%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CD (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CS (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 HC (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 15 15 0 3 12 5 10 3 12 12 3 10 5 2 13 Fin. (88%) (88%) (0%) (100%) (86%) (71%) (100%) (75%) (92%) (86%) (100%) (91%) (83%) (100%) (87%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 IT (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Tele. (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Util (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 17 17 0 3 14 7 10 4 13 14 3 11 6 2 15 Total (100%) (100%) (0%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) Note: Ene. refers to Energy; Mat. refers to Materials; Ind. refers to Industrials; CD refers to Consumer Discretionary; CS refers to Consumer Staples; HC refers to Health Care; Fin. refers to Financials; IT refers to Information Technology; Tele. refers to Telecommunication; and Util refers to Utilities. Sectors

26

Table (18) Firms with Audit Report Lag of More than 90 Days per Sector and per Corporate Governance Variable No. Auditor Female CEO Director Institutional Government Family of Type on Board Duality Ownership Ownership Ownership Ownership Sample Big 4 Non-Big 4 Yes No Yes No Yes No Yes No Yes No Yes No 2 2 0 2 0 2 0 2 0 2 0 1 1 1 1 Ene. (5%) (6%) (0%) (7%) (0%) (8%) (0%) (7%) (0%) (5%) (0%) (6%) (4%) (20%) (3%) 10 9 1 6 4 7 3 6 4 10 0 3 7 1 9 Mat. (23%) (28%) (9%) (22%) (25%) (28%) (17%) (22%) (25%) (24%) (0%) (17%) (28%) (20%) (24%) 6 3 3 4 2 3 3 4 2 6 0 4 2 1 5 Ind. (14%) (9%) (27%) (15%) (13%) (12%) (17%) (15%) (13%) (14%) (0%) (22%) (8%) (20%) (13%) 5 3 2 3 2 2 3 3 2 5 0 0 5 0 5 CD (12%) (9%) (18%) (11%) (13%) (8%) (17%) (11%) (13%) (12%) (0%) (0%) (20%) (0%) (13%) 3 3 0 2 1 2 1 1 2 2 1 2 1 0 3 CS (7%) (9%) (0%) (7%) (6%) (8%) (6%) (4%) (13%) (5%) (100%) (11%) (4%) (0%) (8%) 1 1 0 1 0 1 0 1 0 1 0 1 0 0 1 HC (2%) (3%) (0%) (4%) (0%) (4%) (0%) (4%) (0%) (2%) (0%) (6%) (0%) (0%) (3%) 12 9 3 6 6 6 6 8 4 12 0 4 8 2 10 Fin. (28%) (28%) (27%) (22%) (38%) (24%) (33%) (30%) (25%) (29%) (0%) (22%) (32%) (40%) (26%) 3 1 2 3 0 2 1 2 1 3 0 3 0 0 3 IT (7%) (3%) (18%) (11%) (0%) (8%) (6%) (7%) (6%) (7%) (0%) (17%) (0%) (0%) (8%) 1 1 0 0 1 0 1 0 1 1 0 0 1 0 1 Tele. (2%) (3%) (0%) (0%) (6%) (0%) (6%) (0%) (6%) (2%) (0%) (0%) (4%) (0%) (3%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Util (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) 43 32 11 27 16 25 18 27 16 42 1 18 25 5 38 Total (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) Note: Ene. refers to Energy; Mat. refers to Materials; Ind. refers to Industrials; CD refers to Consumer Discretionary; CS refers to Consumer Staples; HC refers to Health Care; Fin. refers to Financials; IT refers to Information Technology; Tele. refers to Telecommunication; and Util refers to Utilities. Sectors

27

4.2 Hypotheses Testing These hypotheses concern with investigating the effect of corporate governance mechanisms and control variables on audit report lag are tested by using OLS analysis. Table (19) provides the results for the multivariate regression model. The following equation is used for the research model: ARL = α + β1 BrdSize + β2 BrdIndp + β3 Duality + β4 BrdDiv + β5 OwnCon + β6 DirOwn + β7 FamOwn β7 + β8 InstOwn + β9 GovOwn+ β10 AudTyp + β11 IndTyp + β12 ROA + β13 Lvg + β14 FrmSize Table (19): OLS regression results Pred. Coeff. t-statistics Sign Constant 97.635 4.674 BrdSize -0.250 -0.370 BrdIndp -1.469 -0.155 Duality + -3.638 -0.811 BrdDiv 3.032 0.630 OwnCon + 9.850 1.348 DirOwn + 6.358 1.558 FamOwn -6.200 -1.033 InstOwn 14.303 1.667* GovOwn -8.932 -2.211** AudType -17.832 -3.207*** IndTyp 2.437 0.593 ROA -46.584 -2.291** Lvg -4.344 -0.508 FirmSize -1.303 -2.044** F-statistics 3.238 p-value for F-test 0.000 R-squared 0.169 adjusted R2 0.117

VIF 1.320 1.373 1.543 1.655 1.155 1.264 1.110 1.330 1.221 1.130 1.083 1.163 1.309 1.915

*Statistically significant at the 0.10 level ** Statistically significant at the 0.05 level *** Statistically significant at the 0.01 level

The model examines the relationships between corporate governance mechanisms and control variables on audit report lag. The R2 is 0.169 and the model appears significant (F = 3.238, p = 0.000). Institutional ownership appears to have an effect on audit report lag, where the estimated coefficient is positive and statistically significant at 10% level. Government ownership appears to have an effect on audit report lag where the estimated coefficient is negative and statistically significant at 5%. From the control variables, auditor type appears to have an effect on audit report lag, where the estimated coefficient is negative and statistically significant at 1% level. Return on 28

assets and firm size have an effect on audit report lag, where the estimated coefficients are and negative, both are statistically significant at 5%. The highest VIF obtained is 1.915. The results related to institutional investors is consistent with the results of Lim et al. (2014) who argue that large institutional ownership can reduce information asymmetry as the institutional owner can enforce the management to disclose financial information in an appropriate time. The results related to governmental ownership is consistent with Lim et al. (2014) who found that firms with government as the largest shareholder have a substantially shorter reporting lag but it contradicts with Johnsona and Mitton (2003) who argued that the timeliness of financial reporting of government-owned firms is lower. Regarding auditor type, our result is consistent with the findings of prior studies that reveal a significant relationship between audit type and financial reporting timeliness (Ibadin et al., 2012; Shukeri and Islam, 2012; Türel, 2010) but it is not consistent with the results of other studies that found no significant relationship between audit type and reporting timeliness (Afify, 2009; Al-Ajmi, 2008; Al-Ghanem and Hegazy, 2011; Dibia and Onwuchekwa, 2013; Ika and Ghazali, 2012). Our results related to profitability is consistent with the note that in firms that have profit, the management may be encouraged to communicate good news to their shareholders, Thus the management may persuade the auditor to issue his/her report in a shorter period (Shukeri and Islam, 2012). While in the case of firms experiencing losses tend to delay their financial statement. furthermore, because of the audit business risk associated with losing firms, auditor may need more time to issue the audit opinion (Afify, 2009). Our result in this context is consistent with Pourali et al. (2013) who found a significant negative association between audit delay and changes percent in earnings per share (as measure of firm profitability) but it is not consistent with the result of Ibadin et al. (2012) who did not find statistically significant association between firm’s profitability and audit report lag. The result related to firm size is consistent with the results of Fagbemi and Uadiale (2011) who found a significant association between timeliness of financial reports and company size and with Ezat and El-Masry (2008) who found that company size is positively and significantly associated with corporate internet disclosure timeliness. Furthermore, this study is not consistent with Pourali et al. (2013) who found that there is a strong but positive relationship between audit delay and company size. 5. Summary and conclusions This paper examines the effect of board structure and ownership structure on the timeliness of financial reporting. It investigates and reports on the extent, nature and determinants of audit report lag in companies constituting the S&P Mid-East and Africa emerging BMI index. As there is little 29

empirical study on audit report lag in the Middle East and the African countries, this paper is an important contribution to filling the gap in the literature which is done by empirically examining the impact and effect of corporate governance mechanisms on audit report lag in South Africa, Egypt, Morocco, Qatar, and Emirates. This is of particular importance at a time when there is so much interest in investment opportunities in these countries. The importance of this paper is derived from the fact that it extends the previous studies in corporate governance by examining the effect of corporate governance mechanisms on the quality of financial reporting among companies constituting the S&P Mid-East and Africa emerging BMI index. Good corporate governance is critical to the investment activities in the five countries. Therefore, the results of the paper provide valuable insight of the markets to those who invest in one or more of these countries. Though the regulatory authorities in the five countries have taken the necessary actions to have a strong financial market, regulators are facing the challenge of ensuring effective implementation of corporate governance, especially in the areas of transparency, disclosure and board practices. Emerging economies are likely to require more effective and stronger governance mechanisms than their western developed counterparts if they are to become equal, full, and active participants in the global financial marketplace. Effective governance is an essential condition to safeguard both the health of financial intermediaries and the business and economic development of emerging countries. Data has been collected and analysed on 238 companies which divided into 10 sectors where there are 71 manufacturing companies which represent about (30%) of the total sample and 167 services companies that have about (70%) of the sample in this study. The audit report lag for each of the 238 companies ranged from a minimum interval of 15 days to a maximum interval of 179 days with an average of 69 days. The results show that institutional ownership has positive significant effect on audit report lag while governmental ownership, auditor type, firm profitability, and firm size have negative significant effect on audit report lag References: Abdelsalam, O. H. and Street, D. L. ( 2007) ‘Corporate governance and the timeliness of corporate internet reporting by U.K. listed companies’, Journal of International Accounting, Auditing and Taxation, Vol. 16 No. 2, pp. 111–130. Adams, R. B. and Ferreira, D. (2009) ‘Women in the Board room and their impact on governance and performance’, Journal of Financial Economics, Vol. 94 No. 2, pp. 291–309. Afify, H. A. E. (2009) ‘Determinants of audit report lag: does implementing corporate governance have any impact? Empirical evidence from Egypt’, Journal of Applied Accounting Research, Vol. 10 No. 1, pp. 56-86.

30

Al-Ajmi, J. (2008) ‘Audit and reporting delays: evidence from an emerging market’, Advances in Accounting, incorporating Advances in International Accounting,Vol. 24 No. 1, pp. 217–226. Alattar, J., and Al-Khater, K. (2008) ‘An empirical investigation of users' views on corporate annual reports in Qatar’, International Journal of Commerce and Management, Vol. 17 No. , pp. 312-325. Al-Ghanem, W. and Hegazy, M. (2011) ‘An empirical analysis of audit delays and timeliness of corporate financial reporting in Kuwait’, Eurasian Business Review, Vol. 1 No. 1, pp. 73-90. Anderson, R. C. and Reeb, D. M. (2003) ‘Founding-family ownership and firm performance: evidence from the S&P 500’. The Journal of Finance, Vol. 58 No. 3, pp. 1301-1328. Apadore, K. and Noor, M. M. (2013) ‘Determinants of audit report lag and corporate governance in Malaysia’, International Journal of Business and Management,Vol. 8 No. 15, pp.151-163. Appah, E. and Emeh, Y. (2013) ‘Corporate governance structure and timeliness of financial reports of quoted firms in Nigeria’, European Journal of Business and Management, Vol. 5 No. 32, pp. 3445. Ashton, R. H., Graul P. R. and Newton , J. D. (1989) ‘Audit delay and the timeliness of corporate reporting’, Contemporary Accounting Research, Vol. 5 No. 2, pp. 657-673. Bamber, E. M., Bamber, L. S. and Schoderbek, M. P. (1993) ‘Audit structure and other determinants of audit report lag: an empirical analysis’, Auditing: A Journal of Practice & Theory, Vol. 12 No. 1, pp. 1-23. Banimahd, B., Moradzadehfard, M. and Zeynali, M. (2012) ‘Audit report lag and auditor change: evidence from Iran’, Journal of Basic and Applied Scientific Research,Vol. 2 No. 12, pp.1227812282. Basuony, M. A. K., Mohamed, E. K. A. and Elbayoumi, A. F. (2014) ‘Corporate internet disclosure in the Arabian Gulf: an empirical examination of determinants and attributes’, Journal of Modern Accounting and Auditing, Vol. 10 No. 7, pp. 747-763. Baydoun, N., Maguire, W., Ryan, N. and Willett, R. (2013) ‘Corporate governance in five Arabian Gulf countries’, Managerial Auditing Journal, Vol. 28 No. 1, pp. 7-22. Beasley, M. (1996) 'An empirical analysis of the relation between the board of director composition and financial statement fraud', Accounting Review,Vol. 71 No.4, pp. 443-465 Blue Ribbon Committee (BRC) (1999) Report and Recommendations of the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees, New York Stock Exchange, New York, NY. Cadbury Committee (1992). Report of the Committee on the Financial Aspects of Corporate Governance. Gee Publishing, London. Carter, D. A., D’Souza, F., Simkins, B. J. and Simpson, W. G. (2010) ‘The gender and ethnic diversity of US boards and board committees and firm financial performance’, Corporate Governance: An International Review, Vol. 18 No. 5, pp. 396–414. Che-Ahmad, A. and Abidin, S. (2008) 'Audit delay of listed companies: A case of Malaysia', International Bu siness Research,Vol. 1 No. 4, pp. 32-39. Cohen, J., Krishanamoorthy, G., and Wright, A. (2004) ‘The Corporate Governance Mosaic and Financial Reporting Quality’, Journal of Accounting Literature, pp. 87-152. Davies, B. and Whittred, G. P. (1980) 'The association between selected corporate attributes and timeliness in corporate reporting: Further analysis', Abacus,Vol. 16 No. 1, pp. 48-60. Denis, D., and McConnell, J. (2003) ‘International corporate governance. ECGI Working Paper Series in Finance, (05). Dibia, N. O. and Onwuchekwa , J. C. (2013) ‘An examination of the audit report lag of companies quoted in the Nigerian Stock Exchange’, International journal of business and social research,Vol. 3 No. 9, pp. 8-16. Dyer, J. C. and McHugh, A. J. (1975) 'The timeless of the Australian annual report', Journal of Accounting Research,Vol. 13 No. 2, pp. 204-219.

31

Eisenhardt, K. (1989) ‘Agency Theory: An Assessment and Review’, The Academy of Management Review, Vol. 14, pp. 57-74. El-Bannany, M. (2008) 'Factors affecting audit report lag in banks: The Egyptian case',Corporate Ownership & Control, Vol. 5 No. 3, pp. 54-61. Ezat, A. and El-Masry, A. (2008) ‘The Impact of corporate governance on the timeliness of corporate internet reporting by Egyptian listed companies’, Managerial Finance, Vol. 34 No. 12, pp. 848867. Fagbemi, T. O. and Uadiale, O. M. (2011) ‘An appraisal of the determinants of timeliness of audit report in Nigeria: evidence from selected quoted companies’ Proceedings of the 2011 New Orleans International Academic Conference, New Orleans, Louisiana USA, pp. 355-372. Fama, E. and Jensen, M. (1983)‘Separation of ownership and control.’,Journal of Law and Economics, June, pp. 301–325. Fama, E., (1980) ‘Agency problems and the theory of the firm’, Journal of Political Economy, Vol. 88, pp. 288-307. Ghazali, N. A. M. and Weetman, P. (2006) ‘Perpetuating traditional influences: voluntary disclosure in Malaysia following the economic crisis’, Journal of International Accounting, Auditing and Taxation, Vol. 15 No. 2, pp. 226–248. Greenbury, R. (1995) Directors’ Remunerations: Report of the Study Group, Chaired by Sir Richard Greenbury. Gee Publishing, London. Guercio, D. D., Seery, L. and Woidtke T. (2008) ‘Do boards pay attention when institutional investor activists “just vote no”?’, Journal of Financial Economics, Vol. 90 No. 1, pp. 84–103. Hampel Report (1998) Committee on Corporate Governance, Final Report of Committee. Gee Publishing, London. Hand, J. R. M. (1990) ‘A test of the extended functional fixation hypothesis’, The Accounting Review, Vol. 65 No. 4, pp. 740-763. Haniffa, R. M., and Cooke, T. E. (2002) ‘Culture, corporate governance and disclosure in Malaysian corporations’, ABACUS, Vol. 38 No. 3, pp. 317-349. Hawser, A. (2005). Money magnet, Global Finance. Vol.19 No. 6, p.30. Hussain, S. and Mallin, C. (2002) ‘Corporate governance in Bahrain’, Corporate Governance: An International Review, Vol. 10 No. 3, pp. 197-210. Ibadin, I. M., Izedonmi, F., and Ibadin, P. O. (2012) ‘The association between selected corporate governance attributes, company attributes and timeliness of financial reporting in Nigeria’, Research Journal of Finance and Accounting, Vol. 3 No. 9, pp. 137-144. Ika, S. R., and Ghazali, N. A. M. (2012) ‘Audit committee effectiveness and timeliness of reporting: Indonesian evidence’, Managerial Auditing Journal, Vol. 27 No.4, pp. 403-424. Jaggi, B., and Tsui, J. (1999) ‘Determinants of audit report lag: further evidence from Hong Kong’, Accounting and Business Research, Vol. 30 No. 1, pp. 17-28. Jennings, W. W. (2005) ‘Further evidence on institutional ownership and corporate value’, Advances in Financial Economics, Vol. 11, pp. 167-207. Jensen, M. (1986) ‘Agency costs of free cash-flow, corporate finance and takeovers’, American Economic Review, Vol. 76, pp. 323-329. Jensen, M., (1993)‘The modem industrial revolution, exit and the failure of internal control systems’, Journal of Finance, Vol. 48, pp. 831-880. Jensen, M., and Meckling, W. (1976) ‘Theory of the firm: managerial behaviour, agency costs and ownership structure’, Journal of Financial Economics, Vol. 3, pp. 305-360. Johnsona, S., and Mitton, T. (2003) ‘Cronyism and capital controls: evidence from Malaysia’, Journal of Financial Economics, Vol. 67 No. 2, pp. 351–382. Joshi, P. and Wakil, A. (2004) ‘A study of the audit committees’ functioning in Bahrain: empirical findings’, Managerial Auditing Journal, Vol. 19 No.7, pp. 832-858. 32

Kent, P., Routledge, J. and Stewart, J. (2010) 'Innate and discretionary accruals quality and corporate governance', Accounting & Finance,Vol. 50 No.1, pp.171-195. Khasharmeh, H. A., and Aljifri, K. (2010) ‘The timeliness of annual reports in Bahrain and the United Arab Emirates: an empirical comparative study’, The International Journal of Business and Finance Research, Vol. 4 No. 1, pp. 51-71. Klein, A. (2002) 'Audit committee, board of director characteristics, and earnings management', Journal of Accounting and Economics,Vol. 33 No. 3, pp. 375-400. Krivogorsky, V. (2006) ‘Ownership, board structure, and performance in Continental Europe’,The International Journal of Accounting, Vol. 41 No. 2, pp. 176-197. Leventis, S., Weetman, P. and Caramanis, C. (2005) 'Determinants of audit report lag: Some evidence from the Athens Stock Exchange', International Journal of Auditing,Vol. 9 No. 1, pp. 45-58. Levitt, A. (1999) ‘Levitt plays up shareholder rights to directors’, Investor Relations Business, April 12, p. 2. Lim, M., How, J. and Verhoeven, P. (2014) ‘Corporate ownership, corporate governance reform and timeliness of earnings: Malaysian evidence’, Journal of Contemporary Accounting & Economics, Vol. 10 No. 1. pp. 32-45. McGee, R. (2007) ‘Corporate governance and the timeliness of financial reporting: A case study of the Russian energy sector’, Available at SSRN 978114. McLelland, A. and Giroux, G. (2000) 'An empirical analysis of auditor report timing by large municipalities', Journal of Accounting and Public Policy, Vol. 19 No. 3, pp. 263-281. Mohamad-Nor, M. N., Shafie, R. and Wan-Hussin, W. N. (2010) ‘Corporate governance and audit report lag in Malaysia’, Asian Academy of Management Journal of Accounting and Finance, Vol. 6 No. 2, pp. 57–84. Mohamed, E. and Basuony, M. (2014) ‘Determinants and Characteristics of Voluntary Internet Disclosures in GCC Countries’, The International Journal of Digital Accounting Research, Vol. 14, pp. 57-91. Mohamed, E., Oyelere, P. and Al Jifri, K. (2009) ‘State corporate governance in Oman: progress has been rapid, sophistication has increased, but there is still room for improvement’, Journal of Taxation and Regulation of Financial Institutions, Vol. 22 No.4, pp. 33-41. Mohamed, E., Basuony. M. and Badawi, A. (2013) ‘The Effect of Corporate Governance on Firm Performance in Egyptian Listed Companies’, Corporate Ownership & Control, Vol. 11 No. 1, pp. 691-705. Mouna, A. and Anis, J. (2013) ‘Financial reporting delay and investors behavior: evidence from Tunisia’, International Journal of Management and Business Research, Vol. 3 No. 1, pp. 57-67. Owusu-Ansah, S. (2000) 'Timeliness of corporate financial reporting in emerging capital markets: empirical evidence from the Zimbabwe Stock Exchange', Accounting & Business Research, Vol. 30 No. 3, pp. 241-254. Peel, M. J. and Clatworthy, M. A. (2001) ‘The relationship between governance structure and audit fees pre-Cadbury: some empirical findings’, Corporate Governance, Vol. 9 No. 4, pp. 286-297. Peterson, C. A. and Philpot, J. (2007) ‘Women’s roles on U.S. fortune 500 boards: director expertise and committee memberships’, Journal of Business Ethics, Vol. 72 No. 2, pp. 177–196. Pourali, M. R., Jozi, M., Rostami, K. H., Taherpour, G. R. and Niazi, F. (2013) ‘Investigation of effective factors in audit delay: evidence from Tehran Stock Exchange (TSE)’, Research Journal of Applied Sciences, Engineering and Technology, Vol. 5 No. 2, pp. 405-410. Rahman, R. A. and Ali, F. H. M. (2006) ‘Board, audit committee, culture and earnings management: Malaysian evidence’, Managerial Auditing Journal, Vol. 21 No. 7, pp. 783-804. Ramsay, I. (2001) Ramsay Report: Independence of Australian Company Auditors: Review of Current Australian Requirements and Proposals for Reform, available at http//www. treasury.gov.au (Accessed on 15/03/2013) 33

Saidi, N. (2011) ‘Corporate governance in the GCC: what has been done & what remains’, Qatar Business Review, November, pp. 11-13. Shleifer, A. and Vishny, R. W. (1994) ‘Politicians and firms’, The Quarterly Journal of Economics, Vol. 109 No. 4, pp. 995-1025. Shleifer, A., and Vishny, R. (1997)‘ A Survey of Corporate Governance’, Journal of Finance, Vol. 52, pp. 737-783. Shukeri, S. N. and Islam, M. A (2012) ‘The determinants of audit timeliness: evidence from Malaysia’, Journal of Applied Sciences Research, Vol. 8 No. 7, pp. 314-3322. Tornyeva, K. and Wereko, T. (2012) ‘Corporate Governance and Firm Performance: Evidence from the Insurance Sector of Ghana’, European Journal of Business and Management, Vol. 4 No. 13, pp. 95-112. Türel, A. (2010) ‘Timeliness of financial reporting in emerging capital markets: evidence from Turkey’, Istanbul University Journal of the School of Business Administration, Vol. 39 No. 2, pp. 227-240. Turnbull, S. (1997) ‘Corporate governance: Its scope, concerns and theories’, Corporate Governance, Vol. 5, pp. 180-205. Vinten, G. (1998) ‘Corporate governance: an international state of the art’, Managerial Auditing Journal, Vol. 13 No. 7, pp. 419-431. Wu, Y. (2004) ‘The impact of public opinion on board structure changes, director career progression, and CEO turnover: evidence from CalPERS' corporate governance program’, Journal of Corporate Finance, Vol. 10 No. 1, pp. 199–227. Xie, B., Davidson, W. N. and DaDalt, P. J. (2003) 'Earnings management and corporate governance: the role of the board and the audit committee', Journal of Corporate Finance,Vol. 9 No. 3, pp. 295-316. Yaacob, N. M. and Che-Ahmad, A. (2012) 'Adoption of FRS 138 and audit delay in Malaysia', International Journal of Economics and Finance,Vol. 4 No. 1, pp. 167-176. Yap, K.-H., Saleh, Z. and Abessi, M. (2011) ‘Internet financial reporting and corporate governance in Malaysia’, Australian Journal of Basic and Applied Sciences, Vol. 5 No.10, pp. 1273-1289.

34