Relationship between corporate governance index and audit report lag: Application on Borsa Istanbul companies that are not liable to prepare consolidated financial statements

The benefit of financial information which can influence decisions taken by decision makers is due to be produced in a suitable time period. The main factor that affects the timeliness of Financial Statements is the audit report lag. Audit report lag is also affected by many factors and one of these factors is adopting corporate governance principles. Corporate governance consists of several principles that provide less arbitrary and transparent organization management regarding to rules and law and form a powerful control and review system. From this point of view, this study investigates the relationship between audit report lag and corporate governance level of companies that are not liable to prepare consolidated financial statements and listed on Istanbul Stock Exchange between years 2006-2011. Also this study analyzes the effects of factors that mentioned in literature on audit report lag. Results of this study show that “to be listed in Corporate Governance Index” relates negatively with audit report lag. “Number of segment reporting” and “listed in Industrial Index” also reduce audit report lag. On the other hand, it’s revealed that “high number of subsidiaries” and “auditing by big four auditing firm” increase audit report lag.