Browsing by Author "Hamidah Mohamed"

This study aims to examine the association between the presence of industry specialist auditors and financial reporting timeliness under full convergence with Malaysian Financial Reporting Standards (MFRS). It is argued that the incorporation of International Financial Reporting Standards (IFRS) into MFRS will lengthen the audit report lag (ARL). However, the presence of industry specialist auditors, who are believed to be experts in a particular industry, is able to reduce the ARL and consequently enhance financial reporting timeliness. Hence, this study, investigates the relationship between the presence of industry specialist auditors and financial reporting timeliness under full convergence with MFRS. In this study, ARL which refers to the lag between financial year end to audit report date, is used as a proxy for financial reporting timeliness. This study extracts the data from the 2012 annual reports of Malaysian public listed companies. First, population of 796 companies is selected to determine the industry specialist auditor based on audit market share in each of 13 sectors. Then, out of 796 companies, only 342 are found to fully comply with MFRS in the first year of implementation based on a consideration of the transitioning entities that were given an extension to comply with MFRS beginning on or after 2014. The findings suggest that ARL has a significant negative relationship with the presence of an industry specialist auditor. This suggests that ARL will become shorter when a company utilizes industry specialist auditors to undertake auditing work under full MFRS convergence and that, this should improve financial reporting timeliness. This study contributes to the literature in two ways: First, it focuses on the first year of full MFRS implementation. Second, it focuses on the effects on companies in an emerging economy, Malaysia, of progressively improving accounting standards to fully comply with MFRS after a transition period of 2014.