DOES INTERNAL AUDIT FUNCTION QUALITY CORRELATE WITH TIMELINESS OF FINANCIAL REPORTING?

Abstract

 This study examines the association of the quality of internal audit function with timeliness of financial reporting in Jordan. We posit that companies with a high internal audit function quality have a shorter timeliness of financial reporting. We use a composite measure of internal audit function quality as developed by Prawitt, Smith and Wood (2009) study. Data was obtained from 87 respondents (internal auditors) of listed companies in Amman Stock Exchange in Jordan and annual reports of the respective firms for the year 2009. Ordinary Least Square (OLS) regression analysis shows high quality of internal audit function is associated with shorter timeliness of financial reporting. The results of this study would be of importance to the Jordanian business market parties and policymakers.

Keywords: Internal Audit Function Quality; Timeliness of financial reporting; Jordan.