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Oct 13, 2025 by talynt.org 26 views

The Effect of Audit Opinion, Debt to Total Assets, Earnings Per Share, and Company Size on Audit Report Lags in Property and Real Estate Companies Listed on the Indonesia Stock Exchange

Introduction

The audit report lag, which refers to the time needed by the auditor to complete and issue their audit report after the end of the accounting period, is a critical aspect of the audit process. In the context of property and real estate companies in Indonesia, factors such as audit opinion, debt to total assets, earnings per share, and company size can provide important insights on the company's financial performance and health. This study aims to determine the effect of these factors on audit report lags in property and real estate companies listed on the Indonesia Stock Exchange (IDX).

Methodology

The sample used in this study consisted of 22 companies registered on the IDX from 2009 to 2013. The research method used was purposive sampling, where the data analyzed was secondary data originating from the financial statements of each company published through the website www.idx.co.id. The analysis model used in this study is multiple linear regression analysis with the help of SPSS computer program version 18.0, using the T test and the F test.

Results

The results showed that simultaneously, audit opinion, debt ratio to total assets, earnings per share, and company size had a significant influence on the audit report lag of property companies and real estate registered on the IDX. However, partially, earnings per share and company size have a greater influence compared to audit opinions and debt ratios to total assets in influencing the company's audit report lag.

Audit Opinion

Audit opinion is a critical aspect of the audit process, as it reflects how the auditor sees the company's financial performance. Inappropriate opinions can extend the audit time because the auditor may require more time to complete the audit and fix the identified problem. For instance, if the auditor issues a qualified opinion, it may indicate that the company's financial statements are not accurate or complete, which can lead to a longer audit process.

Debt to Total Assets

The debt to total assets ratio shows the proportion of debt to the total assets of the company. Companies with high debt ratios may face greater risks in terms of liquidity, which can cause delays in the audit process. The auditor may need to conduct a more in-depth analysis to ensure that the financial statements are accurate. For example, if a company has a high debt ratio, the auditor may need to verify the company's ability to pay its debts, which can lead to a longer audit process.

Earnings Per Share (EPS)

EPS is an important performance indicator, which can influence investment decisions and market perceptions of the company. Companies with high EPS are usually more attractive to investors, thus encouraging auditors to accelerate the settlement of audit reports to maintain the company's reputation. For instance, if a company has a high EPS, the auditor may be more likely to issue a clean opinion, which can lead to a faster audit process.

Company Size

Company size also affects the audit report lag. Larger companies may have a more complicated process and complexity in their financial management, so that audits take longer than smaller companies. For example, larger companies may have more complex financial transactions, which can lead to a longer audit process.

Conclusion

Overall, this research illustrates that certain financial factors have a significant influence on the duration of the audit report. Understanding the relationship between these elements is very important for investors, management, and other stakeholders to make informational decisions. The sustainability of the company and financial transparency is very dependent on the efficiency and effectiveness of the audit process, which in turn is influenced by the company's financial condition itself.

Recommendations

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

Audit Opinion: Auditors should be more careful when issuing audit opinions, as it can affect the audit report lag.
Debt to Total Assets: Companies with high debt ratios should be more transparent about their financial condition, which can help to reduce the audit report lag.
Earnings Per Share (EPS): Companies with high EPS should be more proactive in maintaining their financial transparency, which can help to reduce the audit report lag.
Company Size: Larger companies should be more efficient in their financial management, which can help to reduce the audit report lag.

Limitations

This study has several limitations, including:

Sample size: The sample size used in this study is relatively small, which may limit the generalizability of the findings.
Data source: The data used in this study is secondary data, which may be subject to errors or biases.
Methodology: The methodology used in this study is multiple linear regression analysis, which may not be the most appropriate method for analyzing the data.

Future Research

Future research should aim to:

Increase sample size: Increase the sample size to make the findings more generalizable.
Use primary data: Use primary data to reduce the risk of errors or biases.
Use alternative methodologies: Use alternative methodologies, such as structural equation modeling, to analyze the data.

Conclusion

In conclusion, this study has shown that audit opinion, debt to total assets, earnings per share, and company size have a significant influence on the audit report lag of property and real estate companies listed on the IDX. Understanding the relationship between these elements is very important for investors, management, and other stakeholders to make informational decisions. The sustainability of the company and financial transparency is very dependent on the efficiency and effectiveness of the audit process, which in turn is influenced by the company's financial condition itself.
Frequently Asked Questions (FAQs) about the Effect of Audit Opinion, Debt to Total Assets, Earnings Per Share, and Company Size on Audit Report Lags in Property and Real Estate Companies Listed on the Indonesia Stock Exchange

Q: What is audit report lag?

A: Audit report lag refers to the time needed by the auditor to complete and issue their audit report after the end of the accounting period.

Q: What are the factors that affect audit report lag?

A: The factors that affect audit report lag include audit opinion, debt to total assets, earnings per share, and company size.

Q: How does audit opinion affect audit report lag?

A: Audit opinion can affect audit report lag because it reflects how the auditor sees the company's financial performance. Inappropriate opinions can extend the audit time because the auditor may require more time to complete the audit and fix the identified problem.

Q: How does debt to total assets affect audit report lag?

A: Debt to total assets can affect audit report lag because companies with high debt ratios may face greater risks in terms of liquidity, which can cause delays in the audit process. The auditor may need to conduct a more in-depth analysis to ensure that the financial statements are accurate.

Q: How does earnings per share (EPS) affect audit report lag?

A: EPS can affect audit report lag because companies with high EPS are usually more attractive to investors, thus encouraging auditors to accelerate the settlement of audit reports to maintain the company's reputation.

Q: How does company size affect audit report lag?

A: Company size can affect audit report lag because larger companies may have a more complicated process and complexity in their financial management, so that audits take longer than smaller companies.

Q: What are the implications of this study for investors, management, and other stakeholders?

A: The findings of this study have implications for investors, management, and other stakeholders because they highlight the importance of understanding the relationship between audit opinion, debt to total assets, earnings per share, and company size and audit report lag.

Q: What are the recommendations of this study for auditors, companies, and regulators?

A: The recommendations of this study include:

Audit Opinion: Auditors should be more careful when issuing audit opinions, as it can affect the audit report lag.
Debt to Total Assets: Companies with high debt ratios should be more transparent about their financial condition, which can help to reduce the audit report lag.
Earnings Per Share (EPS): Companies with high EPS should be more proactive in maintaining their financial transparency, which can help to reduce the audit report lag.
Company Size: Larger companies should be more efficient in their financial management, which can help to reduce the audit report lag.

Q: What are the limitations of this study?

A: The limitations of this study include:

Sample size: The sample size used in this study is relatively small, which may limit the generalizability of the findings.
Data source: The data used in this study is secondary data, which may be subject to errors or biases.
Methodology: The methodology used in this study is multiple linear regression analysis, which may not be the most appropriate method for analyzing the data.

Q: What are the future research directions?

A: Future research should aim to:

Increase sample size: Increase the sample size to make the findings more generalizable.
Use primary data: Use primary data to reduce the risk of errors or biases.
Use alternative methodologies: Use alternative methodologies, such as structural equation modeling, to analyze the data.

Conclusion

In conclusion, this FAQ article provides answers to frequently asked questions about the effect of audit opinion, debt to total assets, earnings per share, and company size on audit report lags in property and real estate companies listed on the Indonesia Stock Exchange. The findings of this study have implications for investors, management, and other stakeholders, and provide recommendations for auditors, companies, and regulators.