Company Operation Complexity

Oct 13, 2025 by talynt.org 46 views

The Effect of Corporate Operations Complexity, Auditor Opinion, Audit Committee, and Company Size on Audit Delay in Mining Sector Companies Listed on the Indonesia Stock Exchange for the 2014-2017 Period

In the business world, especially in the mining sector listed on the Indonesia Stock Exchange, audit delay is an important issue that needs attention. Audit delay refers to delays in completing audit financial statements, which can have an impact on the perception of investors and the credibility of the company in the public eyes. This study focuses on how the complexity of the company's operations, auditor opinion, the existence of audit committees, and company size affect the audit delay in the 2014 to 2017 period.

Background and Significance of the Study

The mining sector is a significant contributor to the Indonesian economy, and companies listed on the Indonesia Stock Exchange are subject to strict regulations and auditing requirements. Audit delay can have serious consequences, including decreased investor confidence, reduced market value, and even delisting. Therefore, understanding the factors that affect audit delay is crucial for companies in the mining sector to take strategic steps to reduce audit delay and strengthen their reputation in the market.

Methodology

This study uses secondary data taken from the Indonesia Stock Exchange website, involving 22 companies engaged in the subsector coal. The purposive sampling method is used to obtain 14 companies that are sampled, resulting in 56 observations for four years of observation. Multiple linear regression analysis is conducted with SPSS 25 software to test the effect of the four independent variables on the audit delay. Before the regression analysis, the data is first examined through a classic assumption test to ensure its validity.

Results and Discussion

The results show that simultaneously, the four independent variables have a significant influence on the audit delay. However, when viewed partially, the complexity of the company's operations has a significant positive influence on the audit delay, while the auditor's opinion actually has a significant negative effect. On the other hand, the audit committee variable and company size do not show a significant effect on the audit delay.

Additional Analysis and Explanation

Company Operation Complexity: The more complex the operation of a company, the more variables that must be analyzed by the auditor. This can cause a longer audit process and increase audit delay. In the mining sector, complexity can come from the many regulations, variations of products, and diverse operational challenges.

Auditor Opinion: The results show that the auditor's opinion has a negative influence on the audit delay. This may be caused by auditors who provide better or positive opinions can accelerate the audit process, considering they are more confident in the audited report. Conversely, poor opinions can make the audit process longer because further investigation needs to be carried out.

Audit Committee: The existence of the Audit Committee plays an important role in the supervision and monitoring of the audit process, but this research shows that there is no significant influence on the audit delay. This could be caused by the effectiveness of the audit committee that has not been maximized in accelerating the audit process or the existence of other factors that are more dominant.

Company Size: Usually, the size of the company is assumed to affect complexity and, therefore, audit delay. However, in this study, the company's size did not show a significant effect. It opens space for further research on how the size of the company in the mining sector affects the audit delay, especially in different contexts or with other variables.

Conclusion and Implications

With this result and analysis, it is hoped that companies in the mining sector can take strategic steps to reduce audit delay, so as to increase investor confidence and strengthen the company's reputation in the market. The findings of this study provide an important insight into the factors that affect audit delay, especially in the context of mining companies. The results suggest that companies should focus on reducing complexity in their operations, improving auditor opinion, and maximizing the effectiveness of the audit committee to reduce audit delay.

Recommendations for Future Research

This study opens space for further research on how the size of the company in the mining sector affects the audit delay, especially in different contexts or with other variables. Additionally, future research can explore the impact of other factors, such as industry characteristics, company performance, and regulatory requirements, on audit delay in the mining sector.

Limitations of the Study

This study has several limitations. Firstly, the sample size is relatively small, which may limit the generalizability of the findings. Secondly, the study only focuses on the mining sector, which may not be representative of other industries. Finally, the study only examines the effect of four independent variables on audit delay, which may not capture other factors that affect audit delay.

Conclusion

In conclusion, this study provides an important insight into the factors that affect audit delay in the mining sector. The findings suggest that companies should focus on reducing complexity in their operations, improving auditor opinion, and maximizing the effectiveness of the audit committee to reduce audit delay. The study also opens space for further research on how the size of the company in the mining sector affects the audit delay, especially in different contexts or with other variables.
Frequently Asked Questions (FAQs) about the Effect of Corporate Operations Complexity, Auditor Opinion, Audit Committee, and Company Size on Audit Delay in Mining Sector Companies Listed on the Indonesia Stock Exchange for the 2014-2017 Period

Q: What is audit delay, and why is it an important issue in the mining sector?

A: Audit delay refers to delays in completing audit financial statements, which can have an impact on the perception of investors and the credibility of the company in the public eyes. It is an important issue in the mining sector because it can lead to decreased investor confidence, reduced market value, and even delisting.

Q: What are the four independent variables that affect audit delay in this study?

A: The four independent variables that affect audit delay in this study are:

Company Operation Complexity: The more complex the operation of a company, the more variables that must be analyzed by the auditor.
Auditor Opinion: The auditor's opinion can affect the audit process, with better or positive opinions accelerating the audit process and poor opinions making it longer.
Audit Committee: The existence of the Audit Committee plays an important role in the supervision and monitoring of the audit process.
Company Size: The size of the company is assumed to affect complexity and, therefore, audit delay.

Q: What are the findings of this study?

A: The findings of this study show that simultaneously, the four independent variables have a significant influence on the audit delay. However, when viewed partially, the complexity of the company's operations has a significant positive influence on the audit delay, while the auditor's opinion actually has a significant negative effect. On the other hand, the audit committee variable and company size do not show a significant effect on the audit delay.

Q: What are the implications of this study?

A: The findings of this study provide an important insight into the factors that affect audit delay, especially in the context of mining companies. The results suggest that companies should focus on reducing complexity in their operations, improving auditor opinion, and maximizing the effectiveness of the audit committee to reduce audit delay.

Q: What are the limitations of this study?

A: This study has several limitations, including a relatively small sample size, a focus on the mining sector, and an examination of only four independent variables.

Q: What are the recommendations for future research?

A: This study opens space for further research on how the size of the company in the mining sector affects the audit delay, especially in different contexts or with other variables. Additionally, future research can explore the impact of other factors, such as industry characteristics, company performance, and regulatory requirements, on audit delay in the mining sector.

Q: What are the practical implications of this study for companies in the mining sector?

A: The findings of this study provide practical implications for companies in the mining sector, including the need to reduce complexity in their operations, improve auditor opinion, and maximize the effectiveness of the audit committee to reduce audit delay.

Q: What are the future directions for research on audit delay in the mining sector?

A: Future research on audit delay in the mining sector can explore the impact of other factors, such as industry characteristics, company performance, and regulatory requirements, on audit delay. Additionally, research can examine the effect of audit delay on company performance and market value.

Q: What are the policy implications of this study for regulatory bodies and stock exchanges?

A: The findings of this study provide policy implications for regulatory bodies and stock exchanges, including the need to develop and implement policies that reduce audit delay and improve the effectiveness of audit committees.