Audit committee characteristics and the audit report lag in Greece

Abstract

We review prior empirical studies that investigate the effect of audit committee characteristics on audit report lag and provide insights about this corpus of scholarly literature. We also determine whether these audit committees’ compositional features are associated with audit report lag in the context of an emerging market (Greece). Using a unique set of data hand-collected from the annual reports for 130 firms listed on the Athens Stock Exchange, a multiple regression analysis is conducted to identify and explain this association. This analysis identifies the four audit committee characteristics most frequently mentioned in the literature. By empirically examining these, we demonstrate that audit committee diligence is associated with a shorter audit report lag. The results generally satisfy a number of alternative benchmark tests that control for different types of proxies and transformations of audit report lag. Our results could assist practitioners and/or policy makers in perceiving the efficacy of audit committee diligence as a means to improve the timeliness of financial reporting. This is, to the best of the authors’ knowledge, the first study that provides a synopsis of the prior literature and examines this relationship in the Greek context.