The Effect Of Profitability, Solvency, Liquidity, Activity, Company Size And Audit Opinion On Audit Report Lag In Food And Beverages Companies Listed On The Indonesia Stock Exchange In 2018-2020

The Effect of Financial Factors and Audit Opinion on Delays in Audit Reports on Food and Beverage Companies in Indonesia

Introduction

The food and beverage industry is one of the most significant sectors in the Indonesian economy, with increasing contributions to the country's GDP. In this context, the analysis of the delay in the Audit Report (Audit Report Lag) is a crucial thing, considering that financial statements play an important role in decision making for various parties. This study examines the effect of several factors, namely profitability, solvency, liquidity, activity, company size, and audit opinion on late audit reports on food and beverage companies listed on the Indonesia Stock Exchange (IDX) during the 2018-2020 period.

Background

The food and beverage industry is a vital sector in the Indonesian economy, with a significant impact on the country's economic growth. The industry's growth is driven by increasing demand for food and beverages, both domestically and internationally. In this context, the analysis of the delay in the Audit Report (Audit Report Lag) is a crucial thing, considering that financial statements play an important role in decision making for various parties.

Research Methodology

This study uses secondary data obtained from annual financial statements and independent auditor reports that are published online through the official IDX website. The research sample consists of 30 food and beverage companies listed on the IDX. Data analysis techniques used include descriptive statistical analysis and multiple linear regression analysis.

Results

The results showed that several financial factors had a significant influence on the delay in the audit report:

Solvency: A Key Factor in Reducing Audit Report Lag

Solvency has a significant negative effect on Audit Report Lag. That is, the higher the company's solvency, the lower the possibility of delays in the audit report. This shows that companies that have strong financial capacity tend to have a smoother and more efficient audit process. Solvent companies are more likely to have a stable financial position, which enables them to manage their resources effectively and reduce the likelihood of delays in the audit report.

Activity: A Key Factor in Reducing Audit Report Lag

Activity has a significant negative effect on Audit Report Lag. This shows that companies with high levels of activity, such as sales and production, tend to have lower delays in audit reports. Most likely, companies with high activity have a more structured operational process, making it easier for auditors in the audit process. Companies with high activity levels are more likely to have a well-organized and efficient operational process, which enables them to manage their resources effectively and reduce the likelihood of delays in the audit report.

Other Factors Do Not Have a Significant Effect on Audit Report Lag

Meanwhile, other factors do not show a significant effect on the delay in the audit report, namely:

• Profitability: does not have a significant effect on Audit Report Lag.
• Liquidity: does not have a significant effect on the audit report lag.
• Company size: does not have a significant effect on the Audit Report Lag.
• Audit opinion: does not have a significant effect on the audit report lag.

Implications

These findings have important implications for various parties. For companies, these results indicate that increasing solvency and operational activities can help minimize the delay of audit reports. For investors, these results can be additional information in assessing company performance and investment risk. For regulators, these results can be taken into consideration in the development of regulations related to the audit process and financial reporting.

Limitations

It is essential to note that this research has several limitations. First, the data used is secondary data, so there is a possibility of bias. Second, this research only focuses on the factors mentioned above. Other factors such as business complexity, quality of corporate governance, and external factors such as economic conditions, may also have a significant influence on the delay in audit reports.

Conclusion

This study made an important contribution in understanding the factors that influenced the delay in audit reports in food and beverage companies in Indonesia. Further research can be done by considering other factors that have not been covered in this study.

Recommendations

Based on the findings of this study, the following recommendations are made:

• Companies should focus on increasing their solvency and operational activities to minimize the delay of audit reports.
• Investors should consider the solvency and operational activities of companies when assessing their performance and investment risk.
• Regulators should take into consideration the findings of this study when developing regulations related to the audit process and financial reporting.

Future Research Directions

Further research can be done by considering other factors that have not been covered in this study, such as business complexity, quality of corporate governance, and external factors such as economic conditions. Additionally, future research can be done by examining the effect of these factors on the delay in audit reports in other industries.
Frequently Asked Questions (FAQs) on the Effect of Financial Factors and Audit Opinion on Delays in Audit Reports on Food and Beverage Companies in Indonesia

Q: What is the significance of the food and beverage industry in the Indonesian economy?

A: The food and beverage industry is one of the most significant sectors in the Indonesian economy, with increasing contributions to the country's GDP.

Q: What is the purpose of this study?

A: This study examines the effect of several factors, namely profitability, solvency, liquidity, activity, company size, and audit opinion on late audit reports on food and beverage companies listed on the Indonesia Stock Exchange (IDX) during the 2018-2020 period.

Q: What are the key findings of this study?

A: The results showed that several financial factors had a significant influence on the delay in the audit report, including solvency and activity. Meanwhile, other factors such as profitability, liquidity, company size, and audit opinion do not have a significant effect on the delay in the audit report.

Q: What are the implications of this study?

A: These findings have important implications for various parties, including companies, investors, and regulators. For companies, these results indicate that increasing solvency and operational activities can help minimize the delay of audit reports. For investors, these results can be additional information in assessing company performance and investment risk. For regulators, these results can be taken into consideration in the development of regulations related to the audit process and financial reporting.

Q: What are the limitations of this study?

A: This study has several limitations, including the use of secondary data, which may be subject to bias. Additionally, this research only focuses on the factors mentioned above, and other factors such as business complexity, quality of corporate governance, and external factors such as economic conditions, may also have a significant influence on the delay in audit reports.

Q: What are the recommendations of this study?

A: Based on the findings of this study, the following recommendations are made:

• Companies should focus on increasing their solvency and operational activities to minimize the delay of audit reports.
• Investors should consider the solvency and operational activities of companies when assessing their performance and investment risk.
• Regulators should take into consideration the findings of this study when developing regulations related to the audit process and financial reporting.

Q: What are the future research directions?

A: Further research can be done by considering other factors that have not been covered in this study, such as business complexity, quality of corporate governance, and external factors such as economic conditions. Additionally, future research can be done by examining the effect of these factors on the delay in audit reports in other industries.

Q: What are the practical implications of this study?

A: The practical implications of this study are that companies can take steps to minimize the delay of audit reports by increasing their solvency and operational activities. Investors can also use this information to assess the performance and investment risk of companies. Regulators can use this information to develop regulations that promote the efficiency and effectiveness of the audit process.

Q: What are the theoretical implications of this study?

A: The theoretical implications of this study are that it contributes to the understanding of the factors that influence the delay in audit reports. It also provides insights into the relationship between financial factors and audit report lag, which can be used to develop new theories and models in the field of accounting and finance.

Q: What are the policy implications of this study?

A: The policy implications of this study are that it can be used to inform policy decisions related to the audit process and financial reporting. It can also be used to develop regulations that promote the efficiency and effectiveness of the audit process.

Q: What are the future research opportunities?

A: Future research opportunities include examining the effect of other factors on the delay in audit reports, such as business complexity, quality of corporate governance, and external factors such as economic conditions. Additionally, future research can be done by examining the effect of these factors on the delay in audit reports in other industries.