Are country-level political uncertainty and power distance important to the CSR-audit report lag nexus? Evidence from the GCC region

Abstract

ABSTRACT This study examines the effect of corporate social responsibility (CSR) performance on audit report lag and whether political uncertainty and power distance levels impact such association. We find that audit report lag is significantly lower for firms with a high CSR performance. We further find that the impact is evident only for large firms and those whose financial reports are audited by highquality auditors. However, our analysis suggests that political uncertainty and power distance intensity do not moderate the association between CSR performance and audit report lag. Our results remain robust after excluding some control variables, addressing the endogeneity issues, and using alternative audit report lag measures. This study contributes to audit delay literature by recognising CSR practices as a determinant of audit report lag in the GCC setting. The findings of this study carry valuable practical implications for regulatory bodies, policymakers, investors, and managers in the GCC region.