An Empirical Examination Of The Determinants Of Audit Delay In Hong Kong

Abstract

The timeliness of corporate financial reports has been an issue of paramount importance. The recognition that the length of the audit is one of the single most important determinants of the timeliness of the earnings announcement has motivated recent research on audit delay in different countries. This paper is the first-time study in Hong Kong to examine the determinants of 'audit delay', the length of time from a company's financial year-end to its audit report date, on a sample of 292 and 260 listed companies for 1991 and 1990 respectively. A multiple regression analysis is used, modelling audit delay as a function of ten explanatory variables. Besides using seven variables which are found related to audit delay in prior research, we include three additional variables in our study. The result indicates that two variables included in the model are significant across the 2 years examined. Two other variables significantly affect audit delay for one of the 2 years examined. Similar to the findings of prior studies, the adjusted R2 of the model is relatively low in each of the 2 years. Further theoretical and empirical research in different countries are necessary for a better understanding of the determinants of audit delay.