Audit Report Lag and Auditor-Client Geographic Proximity: Evidences from Information Advantage of Interaction & Improve Audit Efficiency

Document Type : Original Article


1 Assistant Professor, Department of Management, North of Tehran Branch, Islamic Azad University, Tehran, Iran

2 MSc. in Auditing, Department of Management, North of Tehran Branch, Islamic Azad University, Tehran, Iran


The purpose of this article is to investigate the relationship between auditor-client geographic proximity and audit report lag. Research data include 917 firm-year observations which consist of 131 sample firms listed on the Tehran Securities & Exchange over the period 2013 to 2019. Research hypotheses analyzed using multivariate regression models based on panel data with fixed effect and generalized least squares method. The results indicated that auditor- client geographic proximity caused to decrease the audit report lag. Because such auditors are able to interact more frequently with the client and obtain client-specific news, which increases their ability to monitor the client effectively; so it leads to decrease in the auditor report lag. According to the findings, some client characteristics, auditor characteristics, board and audit committee characteristics had an impact on audit report lag. Modified audit opinion, board financial expertise, bad news,financial distress position, reporting risk and complexity, external financing and product market competition had a direct impact on auditor report lag; auditor rotation, auditor quality rank, audit committee independence and firm size had an inverse impact on auditor report lag. But audit fee, board independence, institutional ownership, ownership concentration, audit committee financial expertise, financial leverage, capital expenditure and loss had no impact on auditor report lag.


بزرگ اصل، موسی؛ رجب‌دری، حسین؛ خرمین، منوچهر.(1397). بررسی عوامل مؤثر بر انتشار به هنگام گزارش حسابرسی، دانش حسابداری، 9 (1): 115-146.
بنی‌مهد، بهمن؛ بهاری، امیر.(1393). رابطه‌ی بین تعداد بندهای حسابرسی و مدت تصدی مدیر عامل با ارائه به موقع صورت‌های مالی، دانش حسابداری و حسابرسی مدیریت، 3 (2): 53-62.
بیات، علی؛ علی‌احمدی، سعید.(1393). تأخیر حسابرسی و به موقع بودن گزارش‌گری مالی، پژوهش‌های حسابداری مالی و حسابرسی، 6 (22): 97-121.
پورحیدری، امید؛ برهانی‌نژاد، سعیده؛ محمدرضاخانی، وحید.(1394). بررسی تأثیر کیفیت حسابرسی بر به موقع بودن گزارش حسابرسی در شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران، دانش حسابرسی، 14 (58): 85-104.
جمالی‌هنجنی، نیکی؛ پورزمانی، زهرا.(1398). تأثیر رابطه‌ی سیاسی هیأت‌مدیره شرکت بر تأخیر گزارش حسابرسی، دانش حسابداری و حسابرسی مدیریت، 8 (31): 35-44.
دستگیر، محسن و احمدی، زینب.(1393). بررسی عوامل مؤثر بر رتبه‌بندی شرکت‌های بورس اوراق بهادار تهران از نظر به موقع بودن گزارش حسابرسی، بررسی‌های حسابداری، 1 (4): 23-36.
صفایی، سیدعماد؛ همتی، حسن؛ داغانی، رضا.(1395). ارزیابی تأثیر کیفیت حسابرسی بر تأخیر در گزارش‌گری مالی، تحقیقات حسابداری و حسابرسی، 8 (31): 68-85.
صفرزاده، محمدحسین؛ محمدی، عرفان.(1398). اثر ویژگی کمیته‌ی حسابرسی بر رابطه بین پیچیدگی حسابرسی و تأخیر در گزارش حسابرسی، مطالعات تجربی حسابداری مالی، 16 (62): 45-76.
صفری‌گرایلی، مهدی.(1396). تأخیر غیرعادی گزارش حسابرسی و تجدید ارائه‌ی صورت‌های مالی آتی: نقش تعدیلی وابستگی اقتصادی و تخصص صنعت حسابرس، دانش حسابداری و حسابرسی مدیریت، 6 (23): 155-168.
علوی طبری، سیدحسین و عارف‌منش، زهره.(1392). بررسی رابطه‌ی تخصص صنعت حسابرس و تأخیر در ارائه گزارش حسابرسی شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران. دانش حسابداری، 4 (14): 7-26.
کرمی، غلامرضا؛ کریمیان، طاهره؛ سلاطی، صبا.(1396). دوره‌ی تصدی حسابرس، تخصص حسابرس در صنعت و تأخیر گزارش حسابرسی: شواهدی از ایران، مطالعات مدیریت ایران، 10 (3): 641-666.
محمدرضایی، فخرالدین؛ تنانی، محسن؛ علی‌آبادی، ابوالفضل.(1397). خطای حسابرسی: تأخیر در گزارش حسابرسی و نقش تعدیل‎گر مالکیت خانوادگی، بررسی‌های حسابداری و حسابرسی، 25 (1): 51-70.
مهدوی، غلامحسین؛ حسینی‌نیا، سمیه.(1394). بررسی اثربخشی کیفیت حسابرسی بر کاهش تأخیر در ارائه‌ی گزارش حسابرسی شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران، دانش حسابداری، 6 (21): 7-31.
واعظ، سیدعلی؛ عابدی صدقیانی، بابک؛ احمدی، وریا.(1395). بررسی ارتباط شاخص‌های کیفی حسابرسی و ویژگی‌های شرکت با تأخیر در ارائه گزارش حسابرسی، دانش حسابرسی، 15 (62): 101-120.
Abernathy, J.L., M., Barnes, C., Stefaniak, & A., Weisbarth, (2017). An international perspective on audit report lag: A synthesis of the literature and opportunities for future research. International Journal of Auditing, 21 (1),100-127.
Abidin, S., & N.A., Ahmad-Zaluki, (2012). Auditor industry specialism and reporting timeliness. Procedia-Social and Behavioral Sciences, 65: 873-878.
Agarwal, S., & R., Hauswald, (2010). Distance and private information in lending. Review of Financial Studies, 23, 2757-2788.
Ahmad, R.A.R., & K.A., Kamarudin, (2003). Audit delay and the timeliness of corporate reporting: Malaysian evidence. International Conference on Business. University of Hawaii-West Oahu, Honolulu, Hawaii, June 18-21.
Alavi Tabari, H. & Arefmanesh, Z. (2013). Investigating the relationship between the expertise of the auditor industry and the delay in submitting the audit report of companies listed on the Tehran Stock Exchange. Journal of Accounting Knowledge, 4 (14): 7-26. (In Persian)
Apadore, K., & M., Mohd Noor, (2013). Determinants of Audit Report Lag and Corporate Governance in Malaysia. International Journal of Business and Management, 8 (15), 151-163.
Badawy, H., & A., Aly, (2018). The Impact of Auditor Industry Specialization, Type of Auditor and Audit Opinion on ARL: The Case of Egypt. International Journal of Accounting Research, 6(2), 1-8.
Bamber, E.M., L.S., Bamber, & M.P., Schoderbek, (1993). Audit structure and other determinants of ARL: An empirical analysis. Auditing: A Journal of Practice & Theory, 12 (Spring): 1-23.
Banimahd, B. & Bahari, A. (2014). Relationship between the number of audit sections and the term of office of the CEO with the timely submission of financial statements. Accounting Knowledge and Management Audit, 3 (2): 53-62. (In Persian)
Bayat, A. & Ali Ahmadi, S. (2014). Audit delay and timely financial reporting. Financial Accounting and Auditing Research, 6 (22): 97-121. (In Persian)
Blankley, A., D., Hurtt, & J., MacGregor, (2014). The relationship between audit report lags and future restatements. Auditing: A Journal of Practice & Theory, 33 (2), 27-57.
Bozorg Asl, M., Rajabdari, H. & Khorramin, M. (2018). Investigating the factors affecting publication at the time of the audit report. Accounting Knowledge, 9 (1): 115-146. (In Persian)
Bryant-Kutcher, L., E., Peng, & D., Weber, (2013). Regulating the timing of disclosure: Insights from the acceleration of 10-K filing deadlines. Journal of Accounting and Public Policy, 32, 475-494.
Chen, Y., F.A., Gul, C., Truong, & M., Veeraraghavan, (2016). Auditor client specific knowledge and internal control weakness: Some evidence on the role of auditor tenure and geographic distance. Journal of Contemporary Accounting & Economics, 12 (2), 121-140.
Choi, J.H., J.B., Kim, A.A., Qiu, & Y., Zang, (2012). Geographic proximity between auditor and client: How does it impact audit quality?. Auditing: A Journal of Practice & Theory, 31 (2), 43-72.
Dao, M., & T., Pham, (2014). Audit tenure, auditor specialization and audit report lag. Managerial Auditing Journal, 29 (6), 490-512.
Dastgir, M. & Ahmadi, Z. (2014). Investigating the effective factors on the ranking of Tehran Stock Exchange companies in terms of the timeliness of the audit report. Accounting Reviews, 1 (4): 323-36. (In Persian)
Dong, B., D., Robinson, & L.E., Xu, (2018). Auditor-Client Geographic Proximity and Audit Report Timeliness. Advances in Accounting, 40, 11-19.
Doyle, J., & M., Magilke, (2013). Decision usefulness and accelerated filing deadlines. Journal of Accounting Research, 51 (3), 549-581.
Durand,G. (2019). The determinant of audit report lag: a meta analysis. Managerial Auditing Journal, 34 (1), 44-75. 
Ettredge, M.L., C., Li, & L., Sun, (2006). The impact of SOX Section 404 internal control quality assessment on audit delay in the SOX era. Journal of Practice and Theory, 25 (1): 1-23.
Fakhroddin, M., & M.S., Norman, (2018). Audit Report Lag: The Role of Auditor Type and Increased Competition in the Audit Market. Accounting and Finance, 58 (3), 885-920.
Habib, A., & M.B.U., Bhuiyan, (2011). Audit Firm Industry Specialization and the Audit Report Lag. Journal of International Accounting, Auditing and Taxation, 20 (1), 32-44.
Habib, A., M.B.U., Bhuiyan, H.J., Huang, & M.S., Miah, (2019). Determinants of audit report lag: A meta-analysis. International Journal of Auditing, 23 (1), 20-44.
Habib, A., & H.J., Huang, (2019), Abnormally long audit report lags and future stock price crash risk: evidence from China, International Journal of Managerial Finance, 15 (4), 611-635.
Jaggi, B., & J., Tsui, (1999). Determinants of audit report lag: further evidence from Hong Kong. Accounting and Business Research, 30 (1), 17-28.
Jamali Hanjani, N. & Pourzamani, Z. (2019). The effect of political relationship of the company’s board of directors on the delay of audit report. Accounting Knowledge and Management Audit, 8 (31): 35-44. (In Persian)
Jensen, K., J.M., Kim, & H., Yi, (2015). The geography of US auditors: Information quality and monitoring costs by local versus non-local auditors. Review of Quantitative Finance and Accounting, 44, 513-549.
Kang, J.K., & J.M., Kim, (2008). The geography of block acquisitions. The Journal of Finance, 63 (6), 2817-2858.
Karami, G., Karimian, T. & Solati, S. (2017). Auditor tenure, auditor expertise in the industry, and audit report delay: Evidence from Iran. Iran Management Studies, 10 (3): 641-666. (In Persian)
Krishnan, J., & J.S., Yang, (2009). Recent trends in audit report and earnings announcement lag. Accounting Horizons, 23, 265-288.
Lai, K-W. (2019). Audit report lag, audit fees, and audit quality following an audit firm merger: Evidence from Hong Kong. Journal of International Accounting, Auditing and Taxation, 36, 1-21.
Lambert, T.A., K.L., Jones, & J.F., Brazel, (2011). Unintended Consequences of Accelerated Filings: Are Mandatory Reductions Associated with Reductions in Earnings Quality?. Working Paper, University of Massachusetts.
Lee, H.Y., & G.J., Jahng، (2011). Determinants of audit report lag: Evidence from Korea-an examination of auditor-related factors. Journal of Applied Business Research, 24 (2): 27-44.
Lee, H.Y., V., Mande, & M., Son, (2009). Do Lengthy Auditor Tenure and the Provision of Non-Audit Services by the External Auditor Reduce Audit Report Lags?. International Journal of Auditing, 13 (2): 87-104.
Leventis, S., P., Weetman, & C., Caramanis, (2005). Determinants of Audit Report Lag: Some evidence from the Athens Stock Exchange. International Journal of Auditing, 9 (1): 45-58.
Lopez, D. M., & K.T., Rich, (2017). Geographic distance and municipal internal control reporting. Advances in Accounting، 36 (March), 40-49.
Mahdavi, G. & Hosseininia, S. (2015). Investigating the effectiveness of audit quality on reducing delay in reporting the audit of companies listed on the Tehran Stock Exchange. Journal of Accounting Knowledge, 6 (21): 7-31. (In Persian)
Meckfessel, M., & D., Sellers, (2017). The impact of Big 4 consulting on audit reporting lag and restatements. Managerial Auditing Journal, 32 (1): 19-49.
Mohammad Rezaei, F., Tanaei, M. & Aliabadi, A. (2018). Audit error: Delay in audit report and the moderating role of family property. Accounting and Auditing Reviews, 25 (1), 51-70. (In Persian)
Munsif, V., K., Raghunandan, & V.R., Dasaratha, (2012). Internal Control Reporting and Audit Report Lags: Further Evidence. Auditing: A Journal of Practice & Theory, 31(3), 203-218.
Ocak, M., & E.A., Özden, (2018). Signing Auditor-Specific Characteristics and Audit Report Lag: A Research from Turkey. The Journal of Applied Business Research, 34 (2): 277-294.
Petersen, M.A., & R.G., Rajan, (2002). Does distance still matter? The information revolution in small business lending. The Journal of Finance, 57 (6): 2533-2570.
Pourheidari, O., Borhaninejad, S. & Mohammad Rezakhani, V. (2015). Investigating the effect of audit quality on the timeliness of audit reports in companies listed on the Tehran Stock Exchange. Auditing Knowledge, 14 (58): 85-104. (In Persian)
Pradipta, A. (2020). Audit Report Lag: Specialized Auditor and Corporate Governance, GATR Journals gjbssr555. Global Academy of Training and Research (GATR) Enterprise.
Reheul, A.M., T.V., Caneghem, & S., Verbruggen, (2013). Audit report lags in the Belgian nonprofit sector: An empirical analysis. Accounting and Business Research, 43 (2), 138-158.
Rusmin, R., & J., Evans، (2017). Audit quality and audit report lag: case of Indonesian listed companies. Asian Review of Accounting, 25 (2), 191-210.
Safaei, E., Hemmati, H. & Daghani, R. (2016). Assessing the Impact of Audit Quality on Delays in Financial Reporting. Accounting and Auditing Research, 8 (31): 68-85. (In Persian)
Safarigar Ili, M. (2017). Abnormal delays in auditing reports and restatements of future financial statements: The adjusting role of economic dependence and the expertise of the auditing industry. Accounting Knowledge and Management Auditing, 6 (23): 155-168. (In Persian)
Safarzadeh, Mo. H. & Mohammadi, E. (2009). The Effect of Audit Committee Characteristics on the Relationship between Audit Complexity and Delays in Audit Reporting. Empirical Studies in Financial Accounting, 16 (62): 45-76. (In Persian)
Sarkar, H.F. (2016). The Impact of Geographic Proximity between Auditor and Client on Audit Quality: Empirical Evidence from Australia. Master Thesis, Curtin Business School, School of Accounting, Curtin University,
Tanyi, P., K., Raghunandan, & A., Barua، (2010). Audit Report Lags after Voluntary and Involuntary Auditor Changes. Accounting Horizons, 24 (4), 671-688.
Timmermans, M. (2013). The Effect of Auditor-Client Distance on Audit Quality. Master Thesis, Department of Accountancy, Tilburg University.
Waez, A., Abedi Sadeghiani, B. & Ahmadi, V. (2016). Investigating the Relationship between Qualitative Audit Indicators and Company Characteristics with Delays in Reporting. Journal of Accounting Knowledge, 15(62): 101-120. (In Persian)
Wei, L. (2012). Determinants and Implications of reporting Lags in china. A thesis for Degree of Master of Philosophy in Business, Lingnan University
Whitworth, J., & T., Lambert, (2014). Office-level characteristics of the Big 4 and audit report timeliness. Auditing: A Journal of Practice & Theory, 33 (3), 129-152.