Abstract
AbstractTimeliness of corporate annual financial reports is considered to be a critical and important factor affecting the usefulness of information that is made available to external users. The purpose of this paper is to examine the relationship between corporate governance, external auditor’s characteristics index, and timeliness in light of the recent amendments to the Financial Security Law (2005) in Tunisia. The paper uses panel data methodology of 28 Tunisian companies listed on the Tunisian Stock Exchange over the period 2006–2013. This study concludes that the good structures of corporate governance play a key role in improving the quality of timeliness of financial reports. As for the empirical tests, they appear to indicate that whenever the audit report publication date proves to be short, the external auditor’s characteristics index is discovered to be high.
Highlights
One of the important objectives of corporate reporting is to provide information that will assist external users in decision-making
The agency relationship between the managers and shareholders may cause the agency conflicts to occur, the corporate governance is assumed as the best monitoring and controlling mechanism to reduce such problems
In relation to financial reporting and audit timeliness, corporate governance mechanism may reduce the audit business risk of the company; reduce the audit work and hours taken by the auditor to complete their annual audit work
Summary
One of the important objectives of corporate reporting is to provide information that will assist external users in decision-making. Given that the audit reports become the only reliable source available to investors and other external users, in a developing country like Tunisia, it will be interesting to identify all the factors that may influence audit certification (such as corporate governance and earning management). This identification can help guide the reforms to improve the functioning of the financial market, especially after the promulgation of the Financial Security Law (2005). Our results add to the growing body of literature analyzing the relationship between corporate governance mechanisms and timeliness They offer a better understanding of the determinants of timeliness in the Tunisian context.
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