The relationship between audit report delay and investment opportunities

Original Paper

Abstract

Higher investment opportunities can increase audit risk. Therefore, external auditors need to extend the scope of their substantive tests and their audit work, and in turn, this leads to longer audit report delay. This study aims at investigating the relationship between audit report delay and the extent of investment opportunities among firms listed on Tehran stock exchange (TSE). We tested our hypotheses on a sample of 133 firms listed on TSE during the period 2006–2014, using multivariate regression analysis on panel data. Our results revealed that the audit report delay is longer for firms with higher investment opportunities. The research results also show that small companies, lost companies and companies that have major weakness in internal controls, are likely to have a longer delay in the audit report. The delay in the audit report of companies that had an independent auditor change is greater during the current period. The paper provides useful information for firms’ management and external auditors.

Keywords

Investment opportunities Audit report delay Audit risk Independent auditors 

JEL Classification

M41 M42 

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Copyright information

© Eurasia Business and Economics Society 2016

Authors and Affiliations

  1. 1.Academic Member of Accounting, Baft Higher Education CenterShahid Bahonar University of KermanKermanIran

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