The Moderating Effect of the Ownership Structure on Audit Committee Characteristics and Audit Report Lag: Evidence from Jordan

The Moderating Effect of the Ownership Structure on Audit Committee Characteristics and Audit Report Lag: Evidence from Jordan | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article The Moderating Effect of the Ownership Structure on Audit Committee Characteristics and Audit Report Lag: Evidence from Jordan Mustafa Dawas, Yousef Abu Siam, Mahmoud Nassar, Khalil Nimer This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7206796/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Purpose The purpose of paper is to investigate the effect of some characteristics of the audit committee, including size, independence, and financial expertise, on the audit report lag in industrial companies in Jordan. It also verifies whether the institutional ownership level influences the connection between these traits of the audit committee and the period that could be used to release audit reports. Research/Methodology/Approach: The study is quantitative in nature and relies on the figures using the annual financial statements of 39 listed industrial companies on the Amman Stock Exchange in 2019–2023. In order to test the concepts, multiple linear regression models are employed. It also inspects the data using descriptive statistics and diagnostic tests to ensure reliability of the results. Additional variables such as board size are incorporated so as to make the results more precise. Results The results indicate that size and financial knowledge of audit committee are two of the features that have a large effect on the speed at which audit reports are published. In addition, institutional ownership contributes to the increased strength of this impact. The key lesson is that good corporate governance practices are relevant in enhancing efficiency of financial reporting. Practical Implications: The study can be used by policymakers, those concerned with regulations, and policymakers involved in corporate governance in the developing nations. Companies can accelerate the release of audit reports and render the financial information more transparent by enhancing the composition and qualification of the audit committees and motivating the active participation of the institutional investors. Originality/Value: This study adds to the current knowledge because it uses institutional ownership in the determination of the impact of the characteristics of the audit committee on audit report lag. It offers a real-life evidence of a developing country, discussing the role of the institutional investors in lessening the problems between the company management and the shareholders and also accelerating the financial reporting. Business and commerce/Business and management Social science/Business and management Business and commerce/Finance Social science/Finance Audit Committee Characteristics Audit Report Lag Institutional Ownership Corporate Governance Jordanian Industrial Sector 1. Introduction In fact, quality financial reporting is one of the factors that have made it easier to make good economic decisions among people. The timeliness of the information is one of the significant characteristics of the high quality of financial reporting (Ebaid, 2022 ). In case financial information in real-time is offered, the user can make a decision on the basis of current and trustworthy data. A large indicator of the timely nature of financial reporting is what is known as audit report lag, the number of days between the close of a company fiscal year and the date it receives an audit report on its financial statements prepared by its external auditor. During the last several years, the issue of audit report timeliness has become the object of the increasing interest due to its association with transparency, accountability, and the quality of business governance (Sulimany, 2024 ). Slow audit reports might cause loss of investor confidence, cause a gap in information, and produce bad investment decisions. The international accounting standards emphasize on minimization of delays in audit in order to promote good practice in management and enhance the quality of financial disclosures (Abbas and Frihatni 2023 ; Agyei-Mensah,2022; Aksoy et al., 2021 ; Al Mutawa and Suwaidan, 2022 ). The audit committee is a board of directors subcommittee responsible in monitoring the financial reporting and the audit procedure. Studies obtained indicate that good audit committees, which have characteristics such as independence, financial experience, and size adequacy, are able to enhance internal controls, audit complexity, audit-reporting time consumption. Nevertheless, the external factors might affect the outcomes of the audit committee features (Aksoy et al., 2021 ). The ownership structure, and in particular institutional ownership is one such factor. Institutional investors, such as the banks, insurance and investment funds, possess the experience and resources that are required to assist the work of audit committees in ensuring that financial information is released in time (Al-ahdal and Hashim, 2022 ; Aldoseri et al., 2021 ; Ali et al., 2022 ). According to the Agency Theory, the present paper examines the issue of institutional ownership as an aspect that could impact the way in which the characteristics of the audit committee impact the timeliness of the audit reports. The findings of the previous research indicated that institutional investors could positively contribute to enhancing the monitoring functions of the board in developing markets where there is a poor governance framework (Idris et al., 2018 ). Thus, the given study will explore this problem in the environment of the Jordanian industrial companies, where the corporate governance practices are in their infancy. Although the Jordan Securities Commission has developed regulations, according to which financial statements must be published in a timely manner, the facts prove that not all companies are able to meet these dates (Ishak & Nugraha, 2023 ). Such delays would prejudice transparency and lower the investor confidence in the financial statements. The literature in this area has provided inconclusive findings concerning the influence of audit committee characteristics on the timeliness of audit reports. The existence of this relationship is supported by some studies in which the relationship is approximated as high, whereas as other studies fail to find any relationship. Such inconsistency is an indicator that these differences could be attributed to numerous factors, including institutional ownership and regulatory pressure (Al-Qublani et al., 2020 ; Alshammari, 2024 ; Alsheikh and Alsheikh, 2023 ). This study is both practical and theoretical. Theoretically, it helps to understand corporate governance because it addresses the issue of the impact of the institutional ownership on the connection between the characteristics of the audit committee and the promptness of audit reports, which have not been much examined in the context of emerging countries such as Jordan (Ishak & Nugraha, 2023 ). Practically, the results may assist the regulators, policymakers, and corporate boards to determine the factors that enhance financial reporting. As the Jordanian capital market is still developing, the availability of institutional investors and performance of audit committees can form the future policy and grow the confidence of investors. The findings also help in assisting the stakeholders to make informed decisions particularly on circumstances where governance systems and regulations are not at an advanced stage. In the following section, the theoretical framework and available literature will be reviewed. The research design, the data collection methods and the analysis methods will be delineated in the methodology section. Lastly, the paper will give the results, comment on the results and make recommendations and suggestions on what can be done practically and policies changed. 2. Review of Literature and Theoretical Background 2.1. Effectiveness of the Audit Committee and Agency Theory This study is based on Agency Theory since it is focused on the different problems, which are caused by the conflict of interest between the corporate management (agents) and shareholders. Such conflicts occur due to the separation of ownership and control, which causes the imbalance of information. To counter the same, several governance mechanisms are used to watch over the activities of the managers and make sure that they do what is in the greatest benefit of the shareholders (Frischanita, 2018 ). Audit committee is one of the best known internal monitoring systems and is important to the integrity of financial reporting as well as adherence to the audit and accounting standards. Agency Theory believes that a robust audit committee can minimize the agency costs to help in making financial reporting more credible and reliable (Guo & Platikanov, 2019 ). Such committees must be independent, must possess professional skills and must be structured. They can enhance accuracy, transparency and speed of financial reporting when they are written well and have the authority to do so (Lajmi and Yab, 2022 ; Le and Nguyen, 2023 ; Maranjory and Tajani, 2022 ; Musah et al., 2023 ). 2.2. Timeliness of Audit Reports in Financial Governance The quality of timeliness is also important in financial reporting, and the two frameworks that discuss the subject are International Financial Reporting Standards and Financial Accounting Standards Board frameworks. Audit reports timely delivery may be the measure that determines how efficient the financial reporting process of a company is. It can be defined as the number of days that pass between the end of one fiscal year and the day when an independent auditor has signed the audit report (Durand, 2019 ). Slowness in issuing audit reports may hurt market efficiency, diminish confidence of investors as well as decrease the transparency of corporate disclosures. The higher the audit lag, the more it may indicate poor internal control, technical audits, or bad governance (Juwita & Hariadi 2020 ). Conversely, shorter lags indicate that the audit is planned and conducted well, which is usually related to good governance mechanisms including well-functioning audit committees (Sulimany, 2023 ; Sulimanyk, 2024 ; Sultana et al., 2015 ; Sultana et al., 2015 ; Wan-Hussin and Bamahros, 2013 ; Waris and Haji Din, 2023 ; Yeboah et al., 2023 ; Zaman et al., 2011 ). 2.3. Audit Committee Characteristics in Earlier Empirical Studies Research examining the connection between the characteristics of the audit committee and the timeliness of the audit report have been increasing. Generally, experts concur that such factors as independence, expertise, size, and frequency of meetings are significant. Most studies reveal that audit committee financial expertise and independence play an important role in eliminating audit delays (Lajmi & Yab, 2022 ). These results confirm Agency Theory or the idea that firm governance would minimize the information asymmetry and encourage timely information disclosure (Maranjory & Tajani, 2022 ). Institutional ownership is also a factor that is believed by some researchers to be effective in improving audit committees particularly in shortening the period of issuing reports (Oradi, 2021 ; Rifai and Siregar, 2021 ). This has been realised in other emerging markets. Variation in outcomes can be an indication of flaws in the government systems or regulatory loopholes within the developing economies, illustrating the necessity of local audit oversight models (Khan et al., 2020 ). Majority of other studies have examined other forms of corporate governance. As an example, the researchers in Kuwait and Indonesia have considered the board size, financial literacy, and family ownership (Ishaka et al., 2023 ). According to their findings, the financial expertise of boards would prevent delays in the audition process, and family controlled companies tend to undergo the process of delay because of agency-related conflicts. This can be proven by the Agency Theory Type II that connects concentrated ownership to the negative performance of supervisory boards (Sakawa and Watanabel, 2020 ; Shbeilat, 2023 ). Moderating variables are also used in other studies in order to improve their explanations. An example is the study by Juwita & Hariadi ( 2020 ) which considered the interaction between audit firm size and audit committees, where the larger audit firms make the effect of the effective audit committees on timeliness growing, though not on internal audit units. On the same note, Frischanita ( 2018 ) examined institutional ownership along with gender among other aspects in three ASEAN countries and came up with the result that only institutional ownership has a significant effect of reducing audit delays, whereas committee characteristics and gender have minimal impacts. Audit report timeliness is already a well-researched subject internationally; however, hardly any research is done on the Jordanian industrial companies (Sakawa & Watanabel, 2020 ). Jordan is a growing economy that has changing governance systems, thus making it a unique institutional and regulatory framework that influences the correlation between the audit committees, ownership structure, and audit timeliness of reporting. Although regulatory authorities such as the Jordan Securities Commission implement policies that encourage timely financial disclosures and financial information dissemination, some companies adopt the practice better than others (Musa et al., 2023). Such a discrepancy causes questions regarding the efficiency of internal governance systems and the active involvement of shareholders in organizations surveillance. Consequently, there exists a manifest necessity of the empirical research targeting at the Jordanian industrial sector, in which the properties of firms and ownership structure deviate of the ones that are inherent to the developed markets (Singh et al., 2022 ; Sulimany, 2024 ). 3. Methodology 3. 1 Introduction This section discusses methods in this study such as data collection and data analysis. We will also elaborate the target population of the study, selection of samples, and the means presented to either prove or refute the hypotheses. We shall also explain the statistical methods that shall be applied in processing the data and analyzing the relationships in a scientific, systematic and consistent manner that is inline with the objectives of the study. 3.2 Study Design and Variables Measurement The study concentrates on the entire industrial corporations listed in Amman Stock Exchange in Jordan. It examines the connection between the characteristics of an audit committee and audit report lag (ARL), however, it questions the institutional ownership as a factor that might affect such connection. Audit Committee Independence (ACI): This is governed as a percentage of independent members in audit committee. The majority of the explanatory variables consist in: Audit Committee Financial Expertise (ACFE): It is the proportion of the committee members with accounting, financial management or the banking educational or professional qualifications. Institutional Ownership (IO): It is the proportion of the stocks owned by institutional investors, and this is an indicator of the amount of control that the investors control the company. Audit Committee Size (ACS): It is the number of members of the audit committee. Audit Report Lag (ARL) is a number of days between the close of financial year and publishing of the external audit report. Our variable of interest is this. The moderating variable is: Board Size (BS) is listed as a control variable since it has the potential to influence the speed of issuance of audit reports. The wider the boards can be the more oversight it is likely to deliver which in turn may cut down on time consumed on audit activity. In order to study these relations, the following regression models are applied: Model (1) : ARL it = a 0 + β 1 BS it + β 2 ACS it + β 3 ACI it + β 4 ACFE it + ε it Model (2) : ARL it = a 0 + β 1 BS it + β 2 ACS it + β 3 ACI it + β 4 ACFE it + β 5 ACS*IO it + β 6 ACI*IO it + β 7 ACFE *IO it + ε it In order to achieve clarity and consistency the following are the main constructs and their definition (Ebaid, 2022 ; Fariha et al., 2022 ; Farumi et al., 2023 ; Hasan et al., 2022 ); Attributes of Audit Committee: This incorporates structural and functional attributes that have: Independence: The proportion of non-executive or independent members in the committee. Size: How many individuals are on the audit committee. Financial Expertise: The availability of members with academic or professional experience in accounting or in finance. Audit Report Timeliness: This is the number of days between the last day of financial year and the date in which the independent auditor puts out the report. Ownership Structure (Institutional Ownership): This is the share that is held by the institutional investors such as a bank, insurance firms and investment funds. These are investors who are supposed to monitor, and they can affect the behavior of the management. Board Size: This is the total amount of members on the board. The bigger the board, the positive or a negative impact it can have on the monitoring effectiveness. 3.3 Research Hypotheses In order to answer the research questions and to achieve the objectives of the study, the below null hypotheses are proposed: H 0 1 The independence of audit committee does not significantly influence the timeliness of audit report of the Jordanian industrial companies. H02: No statistically significant difference exists between the effect of audit committee size and timeliness of audit report of the Jordan industrial companies. H03: Investigation of the impact of audit committees financial expertise on timeliness of audit report in industrial companies in Jordan is less important. H04: Institutional ownership does not play any significant role in mediating the connection amid the audit committee independence and the timeliness of the audit report. H 05: Institutional ownership does not play a significant moderating role between the relationship of audit committee size and the audit report timeliness. H 06: Institutional ownership has no significant effect on the relation between audit committee financial expertise and audit report timeliness. 3.4 Population and Sample The population will be all the 46 industrial publicly listed companies in the Amman Stock Exchange in 2023. The final sample consisted of 39 companies that satisfied the following criteria: The company was listed on ASE First Market all through the study period. No trading suspension occurred in the study period. Seven companies were disqualified because of missing data or inability to fit the above requirements. 3.5 Data Collection Sources The audit of the annual financial statements of listed industries companies used by the research was based on secondary information, obtained through the official ASE site. Additional material was also consulted in order to substantiate the literature review and theoretical framework such as peer-review journal articles, theses, and books. 3.6 Statistical Analysis Methods The hypotheses of the study were examined by the following statistical methods so that the research objectives were attained: Descriptive Statistics This has been employed to describe the main characteristics of the variables by giving the measures such as mean, standard deviation, minimum, and maximum, hence giving a vivid view of the distribution of the data. Regression Analysis A multiple linear regression model was applied to consider the influence of characteristics of the audit committee on ARL and to test whether institutional ownership had any moderating powers or not. All the major assumptions of regression were tested before the analysis (the normality of residuals, and the multicollinearity). Statistical calculations were made on SPSS software which is also efficient in working with data sets and carrying out complex calculations. 4. Hypotheses Testing and Data Analysis In this part of the paper, the findings of statistical tests that support or reject the research hypotheses and learn about the relationship between the characteristics of an audit committee and the timeliness of audit reports will be presented. At the end of the section, the five sections are formed: descriptive statistics, multicollinearity and autocorrelation diagnostics, testing of hypothesis concerning the direct effect, moderation analysis, and conclusion concerning the main findings of the chapter. 4.1 Descriptive Statistics Descriptive statistics indicate the overview of variables which have been studied and form the basis of more complex statistical analysis. The mean, standard deviations and ranges of the independent, dependent, moderator and control variables are presented in Table 1 . Table 1 The descriptive statistics for all study variables Variable Mean Standard Deviation Minimum Maximum ACS 3.48 0.67 3.00 6.00 ACI 0.53 0.18 0.33 1.00 ACFE 0.57 0.17 0.33 0.80 ARL in days 54.02 24.27 6.00 183.00 IO 0.12 0.18 0.00 0.63 BS 7.56 2.12 7.00 13.00 As the Table 1 indicates, the mean audit committee size in the Jordanian industrial companies was 3.481. This implies that majority of firms implement the governance principle established by the Jordan Securities Commission that stipulates the audit committee needs at least three members. The fact that the standard deviation is low (0. 671) however indicates that most of the committees are created based on this rule with little variance hence more rule-based rather than performance-based. The audit committee independence (ACI) was captured at 52.6 percent, which implies that the number of members was above 50 percent. Though this is a demonstration of reasonable compliance with the local governance codes, it is not compliant with the global standards which tend to recommend a higher degree of independence, including two-thirds. Lack of independence may possibly influence the capacity of the committee in overseeing the management and may contribute to delays in financial reporting. The mean percentage of the financial expertise (ACFE) was 57.3 percent. This indicates that there is increased awareness of the need of financial knowledge as audit committee. Such expertise enables the members of the firm to have a better grasp of complex accounting matters and the ability to solve them as well as cooperate with other auditors leading to more effective audits. The dependent variable which is audit report lag (ARL) had an average of 54.02 days, a large standard deviation (24. 265) and a maximum lag of 183 days. This dispersion shows that there is a wide difference amongst companies on their speed of issuing audit reports. Although the position of Jordanian businesses is a bit better compared to Saudi Arabia where the mean ARL amounts to 58 days, there is still a lot to be done. Institutional ownership (IO) was considerably low averaging at 11.9 percent. This implies that the Jordanian industries do not have much presence of highly advanced investors. This observation is worrying as this may mean monitoring and accountability to the management who are supposed to focus on quality governance and timely reporting. These results conform to the agency theory that indicates that independence and professional competence deficiencies may aggravate the agency issues and cause delays in auditing. Besides, resource dependency theory identifies that presence of competent and expert members in audit committees would increase effectiveness in governance. 4.2 Multicollinearity and Autocorrelation Diagnostics Diagnostic tests were done to make sure that the regression analyses are adequate by verifying the multicollinearity and autocorrelation. The findings of both Variance Inflation Factor (VIF) test and Durbin-Waston test are presented in Table 2 . Table 2 The VIF results for all independent variables in both models Variable VIF (Model 1) VIF (Model 2) ACS 1.42 1.89 ACI 1.37 1.74 ACFE 2.08 2.38 IO – 3.13 BS 1.46 1.67 All of the independent variables possessed VIF values that were not more than 4, which is the limit of the issue of multicollinearity. This implies that the variables analyzed are independent enough to give the regression coefficients. Durbin-Watson statistics of Model 1 (2.281) and Model 2 (2. 375) were near to ideal 2 which shows that there is no significant autocorrelation in the residuals. These findings validate the fact that the regression models are robust and that the estimators involved are unbiased and as such, the hypothesis testing will be reliable. 4.3 Hypothesis Test: H1-H3 The initial set of hypotheses examined the relation between the nature of the audit committee and the timeliness of the audit report directly. Multiple linear regression was performed and the results are depicted in Table 3 . Table 3 The results of multiple liner regression for hypotheses H1-H3. Variable t-value Sig. (p-value) Coefficient ACS 1.62 0.00 0.38 ACI -1.29 0.04 0.59 ACFE -2.37 0.02 1.63 BS 1.82 0.05 3.28 . The regression analysis indicated that the correlation between audit committee independence (ACI) and audit report lag (ARL) was highly negative, whereas the p-value was 0.040. It implies that greater independence of the audit committees has higher chances of minimizing delays in issuance of audit reports. Without being too much influenced by the management, members can conduct a more objective review, object to the management decision where it is necessary and assist in making the financial reporting process efficient. Such independence assists in establishing confidence in the audit process, and it is, therefore, more effective in bridging the gap between the management of the company and the external auditors. This observation supports the theory of agency according to which independent directors can curb the conflict of interests by paying attention to the interests of shareholders and setting high standards in financial reporting. Audit committee size (ACS) on the other hand had a very strong positive correlations with ARL (p < 0.001) that is, the larger the audit committee the more likely to delay. It is valid that larger committees have an advantage of more opinions and experience in addition to the fact that they are at risk of creating coordination problems as well as slowing the process of decision making. Bigger groups can lead to the lack of accountability, ineffectiveness, and problems with communication, particularly in regions where the system of governance has not been established completely, e.g., in Jordan and most Arab emerging markets. This observation confirms that of earlier studies indicating that past a definite size, committees will become counterproductive and more problems in the form of inefficiencies may arise than the benefits. Also, the outcomes indicated a high negative correlation between audit committee financial expertise (ACFE) and ARL (p = 0.020). This means that the greater the financial literacy of the committee members, the easier it is to watch the audit process and make sure that the financial reports are done on time. Financial expertise will help the members of the committee to comprehend difficult financial issues, ask the necessary questions and effectively communicate with the external auditors. This result shows the theory of resource dependency that emphasizes on the significance of professional knowledge in the structures of governance. Without these skills, committees might not work effectively with auditors hence new audit reports might not be realised on time (Ishak and Nugraha, 2023 ; Ishaka, et al. 2023; Jiang et al., 2022 ; Juwita and Hariadi, 2020 ; Khan et al., 2020 ). Overall, the results make it possible to draw significant governance implications that concern the audit committee size as a quantitative measure of compliance. Nonetheless, the greater influences are with independence and financial expertise as qualitative indicators of timeliness of auditing. As such, regulators and policymakers in the emerging economies such as Jordan are advised to change their emphasis on numerical requirement and shift towards independence and competence of the audit committee. Qualitative approach may enhance the efficiency of governance and make sure that audit committees succeed in carrying out their responsibilities in safeguarding the quality of financial reporting. Table 4 Results of multiple linear regression for hypotheses H4–H6 Variable T Sig. (p-value) Coefficient ACS 1.77 0.00 0.41 ACS × IO -5.73 0.55 -0.48 ACI -2.44 0.62 -1.69 ACI × IO -7.06 0.73 -3.74 ACFE -3.57 0.03 -1.78 ACFE × IO -6.10 0.04 -4.13 BS 2.75 0.01 4.65 4.4 Moderation Analysis: H4 to H6 The second set of the hypotheses was applied to determine whether institutional ownership (IO) has an impact on the relationship between the characteristics of the audit committee and the timeliness of an audit report. We included interactions in the regressions and the result was presented in Table 4 . The moderation analysis was performed to see whether the institutional ownership (IO) influences the relations between the characteristics of the audit committee and the timeliness of the audit report (ARL). The findings were interesting although not so strong with regard to the three hypotheses. On the one hand, the association of audit committee independence (ACI) and institutional ownership was not significant (p = 0.730), meaning that the presence of institutional investors does not make an independent audit committee more or less effective in respect of timely audit reports. This implies that institutional investors who own shares in Jordanian companies cannot be effective to enable the independent directors perform their oversight task properly. This is possibly due to fact that moderate involvement of institutional investors in emerging markets is less active and they do not wish to enter directly into the corporate governance activities to retain good relation with the management. This contrasts with that is experienced in the comparatively mature economies where institutional investors are more engaged in accountability of the companies through the use of their equity shares and timely reporting of their financial position (Chronopoulos et al., 2024 ; Dang and Nguyen, 2022 ). Second, the effect of the interaction between audit committee size (ACS) and institutional ownership was also not significant (p = 0.549). This indicates that institutional investors do not have an effect on the committee size and the timeliness of audit reports. The presence of direct and positive influential effect of ACS on ARL revealed in the previous stage is not changed, which proves the hypothesis that bigger committees may not be more effective, despite the institutional investors that control them. This finding indicates that institutional investors in Jordan might not be disposed or have the capacity to question ineffective governance style like the oversized audit committee which makes governance of corporations very difficult. Conversely, audit committee financial expertise (ACFE) and institutional ownership were also found to have an impressive interaction (p = 0.035). It implies that the beneficial effect of financial expertise on timeliness of audit is reinforced by institutional investors. It reveals that the availability of institutional investors enables effectively performing the duties of the audit committees by its members who are financially knowledgeable and hence generates a superior environment of governance. This conclusion corresponds with the resource dependency theory whereby the technical knowhow and external assistance in the progress of organizations are emphasized. It also implies that possibly institutional investors in Jordan can give more concentration on technical expertise as it is their financial interests that rely on the same and thus can be more interested in the governance concerns of an area regarding the same (Boshnak, 2023a ; Boshnak, 2023b ; Chen et al., 2022 ; Chen et al., 2018 ). In theory, these findings correspond with prior studies that demonstrate the way in which institutional investors engage in corporate governance across different contexts. Indicatively, in their research Khan et al. ( 2020 ) concluded that, in numerous developing economies, institutional investors usually pay more attention to financial skills and the quality of audit rather than structural characteristics of governance. The same tendency could be observed in Saudi Arabia: Ebaid ( 2022 ) discovered that institutional investors were more inclined to approve governance reforms that did not prioritize independence and size of committees but instead, emphasize technical competence. All in all, the moderation analysis indicates that policymakers in Jordan and other Arab states ought to embark on moderating institutional investors by taking measures to empower institutional investors via regulation. This would make them more active and establish a culture of governance which would make them active in the process. The potential of institutional ownership on enhancing the effectiveness of the audit committee would not be feasible without this support (Basuony et al., 2016 ; Bataineh, 2021 ; Bazhair, 2022 Bazhair, 2023 ; Bhuiyan and D’Costa, 2020 ). 4.5 Summary of the Section This part shows the results of the descriptive and inferential test to test the hypotheses of the study. The findings are the most pronounced on how the characteristics of the audit committee- size, independence, and financial experience affect the timeliness of the audit reports in the Jordanian industry companies. There was a strong negative correlation between the audit report lag and audit committee independence as well as financial expertise. This implies that they are a major player in enhancing the efficiency of audit. Conversely, the findings indicated that bigger audit committees used to postpone the issuance of the audit reports, which indicates that at one point, the bigger audit committees might not be more effective regarding the governance issues. The sensitivity test indicated that institutional ownership has a partial effect on the connection between the qualities of the audit committees and the auditing timeliness. The two-sided test of significance showed that financial expertise had a significant and positive influence and independence and the size had no influence. This implies that, despite the fact that institutional investors might be quite useful in success of technically competent audit committees, there might not be much they can contribute in other aspects because of the nature of emergent markets. Overall, such results justify the necessity of a balance between the composition of audit committees and empowerment of institutional investors. This is a balance that is crucial in the promotion of corporate governance as well as the timely reporting of financial statements (Alves, 2023 ; Alzoubi, 2023 ; Astami et al. 2024 ; Bajary et al., 2023 ). 5. Discussion, Recommendations and Future research This part will relate the findings of the study with the knowledge that is already available in regard to corporate governance. The results will be contrasted with those of the earlier researches in Jordan and other related regions in the Arab world. In addition, some of the practical suggestions and future research ideas will be given. 5.1 Findings Discussion The present paper examined the influence of the specifics of an audit committee such as its size, the extent to which the members are independent and the financial expertise on the rate of the audit reports completion (ARL). It also discussed the effect that the institutional ownership has in these Jordanian industrial firms. The analysis indicated that independence and financial knowledge contributed in mitigating ARL, whereas too many members on the committee mostly caused delays in reporting. Such findings support the agency theory, which argues that, independent directors enhance monitoring and reduce the cost associated with conflicts of interest thus, resulting in a more efficient audit procedure. The relationship between financial knowledge and time to process audit reports is also consistent with the resource dependency theory as the members with financial knowledge make things run smoothly with the outside auditors, and problems get solved on a timely basis. Yet the association relating higher audit committees with longer publication times should indicate that a larger committee may not necessarily be superior. It may lead to issues of coordination and it would be difficult to hold people accountable which would negatively affect governance. This demonstrates that a high degree of balance should be attained instead of a big committee. When we examined the effect of institutional ownership in the section where we tested the effect of institutional ownership on such relationships, it was found that institutional ownership aided us in many respects when we talked about financial knowledge and report speed but had little impact on the effect of committee size or independence on report speed. This implies that in such countries as Jordan, institution investors might emphasize more on financial skills than committees structure and independence. 5.2 Practice Implications The paper demonstrates that regulators need to appreciate qualitative features of governance, including, being financially literate and independent audit committee instead of mere size of the audit committee. In the case of institutional investors, the findings indicate the participation in audit committees by the institutional investors with financial competence would enhance the governance outcomes. To corporate boards, the research reveals the relevance of seeking proper balance between committee size, independence and financial expertise that would make audit more speedy and efficient. 5.3 Practice tips 1. The members of the audit committee of a company should be kept financially literate and independent. 2. In some countries such as Jordan, institutional investors should be pushed to participate more in corporate governance. 3. The size of the audit committees should not be very large since they can cause problems and act as a performance deterrent. 5.4 Recommendations of Future Studies Further research may examine the influence of other elements of governance as, e.g., the participation of the CEO as a board member or the level of board diversity on the timeliness of audits. Several studies are also possible to compare the role of institutional investors in the emerging markets and in the developed one. Time-based longitudinal studies could assist in the comprehension of the efficiency of audit committees as new governance regulations are taking place. Declarations Conflict of Interest The author declares that there is no conflict of interest regarding the publication of this article. Funding This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors. Author Contribution Authors’ Contribution StatementM.D. (Mustafa Dawas) contributed to the conceptualization of the study, the development of the research framework, and the final revision of the manuscript.Y.A.S. (Yousef Abu Siam) was responsible for data collection, statistical analysis, and interpretation of the results.M.N. (Mahmoud Nassar) participated in the literature review, drafted significant portions of the manuscript, and assisted in editing and formatting.K.M. (Khalil Miner) contributed to the methodology design, validated the data analysis process, and reviewed the manuscript for intellectual content.All authors read and approved the final version of the manuscript. Data Availability The datasets generated and/or analyzed during the current study are available from the corresponding author on reasonable request. References Abbas A, Frihatni H (2023) The Impact of Audit Committee Characteristics on Audit Report Timeliness: Evidence from Emerging Markets. J Acc Auditing Stud 45(1):123–140 Agyei-Mensah BK (2022) Impact of audit committee attributes on financial reporting quality and timeliness: An empirical study. Afro-Asian J Finance Acc 12(1):82–104. https://doi.org/10.1504/AAJFA.2022.121754 Aksoy T, Karaman E, Kilic M (2021) Institutional ownership and audit report timeliness: Evidence from emerging markets. Emerg Markets Rev 30(2):23–45 Al Mutawa A, Suwaidan M (2022) Corporate governance and audit report timeliness: Evidence from Kuwait. 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Int J Emerg Markets 18:3178–3200 Boshnak N (2023b) Institutional Ownership and Financial Reporting Quality: Evidence from Emerging Markets. Int J Finance Econ 28(2):1345–1362 Chen C, Jia H, Xu Y, Ziebart D (2022) The effect of audit firm attributes on audit delay in the presence of financial reporting complexity. Managerial Auditing J 37(2):283–302 Chen G, Firth M, Gao DN, Rong W (2018) Institutional ownership and audit report lag: Evidence from China. J Int Acc Research 17(2):69–85 Chronopoulos DK, Rempoutsika LM, Wilson JOS (2024) Audit committee oversight and bank financial reporting quality. J Bus Finance Acc 51:657–687. https://doi.org/10.1111/jbfa.12738 Dang VC, Nguyen QK (2022) Audit committee characteristics and tax avoidance: Evidence from an emerging economy. Cogent Econ Finance 10(1):2023263. https://doi.org/10.1080/23322039.2021.2023263 Durand C (2019) Audit committee characteristics and financial reporting timeliness: Evidence from European firms. Eur Acc Rev 28(3):567–590 Ebaid IE-S (2022) Determinants of audit report lag: Evidence from Saudi Arabia. Asian J Acc Res 7(2):145–162 Fariha R, Hossain MM, Ghosh R (2022) Board characteristics, audit committee attributes and firm performance: Empirical evidence from emerging economy. J Accounting Res 7(1):84–96 Farumi L, Wahyudi T, Khamisah N (2023) Influence of audit committee, auditor industry specialization, and audit tenure on audit report lag. Bus Manage Anal J 6(1):58–77 Frischanita Y (2018) A comparative study of the effect of institutional ownership, audit committee, and gender on audit report lag in Indonesia, Malaysia, and Singapore. Indonesian Acc Rev 8(2):131–143 Guo L, Platikanov S (2019) Institutional ownership and corporate governance of public companies in China. PacificBasin Finance J 57:101180 Idris MI, Siam YIA, Ahmad AL (2018) The impact of external auditor size on the relationship between audit committee effectiveness and earnings management. Invest Manage financial innovations 15(3):122–130 Hasan A, Aly D, Hussainey K (2022) Corporate governance and financial reporting quality: A comparative study. Corp Gov 5(3):114–121. https://doi.org/10.1108/CG-08-2021-0298 Ishak JF, Nugraha AA (2023) Determinants of banking sector audit report lag: Evidence from Indonesia. J ASEY 15(1):167–176 Ishaka et al (2023) The Moderating Role of Ownership Concentration on the Relationship Between Audit Committee Characteristics and Audit Report Timeliness: Evidence from Consumer Goods Sector in Nigeria. J Financial Report Corp Gov 35(1):89–112 Jiang W, Wan H, Zhao S (2022) Governance expertise and audit committee effectiveness. Journal of Corporate Finance Juwita R, Hariadi B (2020) The Influence of audit committee and internal audit on audit report lag: Size of public accounting firm as a moderating variable. Int J Res Bus Social Sci 9(2147–4478):137–142 Khan A, Muttakin MB, Siddiqui J (2020) Institutional ownership and audit quality: The moderating role of audit committee characteristics. J Int Acc Auditing Taxation 39:100320 Lajmi A, Yab M (2022) The impact of internal corporate governance mechanisms on audit report lag: Evidence from Tunisian listed companies. EuroMed J Bus 17(4):619–633 Le QL, Nguyen HA (2023) The impact of board characteristics and ownership structure on earnings management: Evidence from a frontier market. Cogent Bus Manage 10(1). https://doi.org/10.1080/23311975.2022.2159748 Maranjory F, Tajani S (2022) The Impact of Audit Committee Independence, Size, Expertise, and Gender on Audit Report Timeliness: Evidence from Tehran Stock Exchange (TSE). Int J Auditing Corp Gov 27(3):145–168 Musah A, Okyere B, Osei-Bonsu I (2023) The influence of the COVID-19 pandemic on audit fees and audit report timeliness of listed firms in Ghana. Cogent Bus Manage 10(2):2217571. https://doi.org/10.1080/23311975.2023.2217571 Oradi F (2021) Transparency and timeliness in financial reporting: Role of audit committees. J Acc Finance 45(2):45–67 Oradi J (2021) CEO succession origin, audit report lag, and audit fees: Evidence from Iran. J Int Acc Auditing Taxation 45:100414. https://doi.org/10.1016/j.intaccaudtax.2021.100414 Rifai M, Siregar SV (2021) The effect of audit committee characteristics on forward-looking disclosure. J Financial Report Acc 19(5):689–706. https://doi.org/10.1108/JFRA-05-2019-0063 Sakawa H, Watanabel N (2020) Institutional ownership and firm performance under stakeholder – oriented corporate governance, Sustainability. 12(3):10–21 Shbeilat MK (2023) Contributors to audit committee effectiveness: An experimental study of external auditors’ perception [Special issue]. Corp Gov Organizational Behav Rev 7(3):291–306. https://doi.org/10.22495/cgobrv7i3sip6 Singh H, Sultana N, Islam A, Singh A (2022) Busy auditors, financial reporting timeliness and quality. Br Acc Rev 54. https://doi.org/10.1016/j.bar.2022 Sulimany H (2024) Ownership Structure and Audit Timeliness: An Agency Theory Perspective. Journal of Corporate Governance Sulimany HGH (2023) Ownership structure and audit report lag of Saudi listed firms: A dynamic panel analysis. Cogent Bus Manage 10(2). https://doi.org/10.1080/23311975.2023.2229105 Sulimanyk A (2024) Audit Report Lag: An Analysis of Factors Affecting Timeliness in Financial Auditing. J Financial Auditing Report 39(2):123–145 Sultana N, Van der Zahn M, J. L (2015) Earnings conservatism and audit committee financial expertise. Acc Finance 55(1):279–310 Sultana N, Singh H, Rahman A (2015) Audit Committee Characteristics and Audit Report Lag. Int J Auditing 19(2):72–87 Wan-Hussin WN, Bamahros HM (2013) Do Expertise and Independence of Audit Committee Members Enhance the Monitoring of Earnings Management? Managerial Auditing J 28(9):787–814 Waris M, Haji Din B (2023) Impact of corporate governance and ownership concentrations on timelines of financial reporting in Pakistan. Cogent Bus Manage 10(1):2164995. https://doi.org/10.1080/23311975.2023.2164995 Yeboah EN, Addai B, Appiah KO (2023) Audit pricing puzzle: Do audit firm industry specialisation and audit report lag matter? Cogent Bus Manage 10(1):2172013. https://doi.org/10.1080/23311975.2023.2172013 Zaman M, Hudaib M, Haniffa R (2011) Corporate governance quality, audit fees and non-audit services fees. J Bus Finance Acc 38(1–2):165–197 Copyright Disclai Additional Declarations No competing interests reported. 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Introduction","content":"\u003cp\u003eIn fact, quality financial reporting is one of the factors that have made it easier to make good economic decisions among people. The timeliness of the information is one of the significant characteristics of the high quality of financial reporting (Ebaid, \u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). In case financial information in real-time is offered, the user can make a decision on the basis of current and trustworthy data. A large indicator of the timely nature of financial reporting is what is known as audit report lag, the number of days between the close of a company fiscal year and the date it receives an audit report on its financial statements prepared by its external auditor. During the last several years, the issue of audit report timeliness has become the object of the increasing interest due to its association with transparency, accountability, and the quality of business governance (Sulimany, \u003cspan citationid=\"CR50\" class=\"CitationRef\"\u003e2024\u003c/span\u003e). Slow audit reports might cause loss of investor confidence, cause a gap in information, and produce bad investment decisions. The international accounting standards emphasize on minimization of delays in audit in order to promote good practice in management and enhance the quality of financial disclosures (Abbas and Frihatni \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Agyei-Mensah,2022; Aksoy et al., \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2021\u003c/span\u003e; Al Mutawa and Suwaidan, \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2022\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eThe audit committee is a board of directors subcommittee responsible in monitoring the financial reporting and the audit procedure. Studies obtained indicate that good audit committees, which have characteristics such as independence, financial experience, and size adequacy, are able to enhance internal controls, audit complexity, audit-reporting time consumption. Nevertheless, the external factors might affect the outcomes of the audit committee features (Aksoy et al., \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). The ownership structure, and in particular institutional ownership is one such factor. Institutional investors, such as the banks, insurance and investment funds, possess the experience and resources that are required to assist the work of audit committees in ensuring that financial information is released in time (Al-ahdal and Hashim, \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Aldoseri et al., \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2021\u003c/span\u003e; Ali et al., \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2022\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eAccording to the Agency Theory, the present paper examines the issue of institutional ownership as an aspect that could impact the way in which the characteristics of the audit committee impact the timeliness of the audit reports. The findings of the previous research indicated that institutional investors could positively contribute to enhancing the monitoring functions of the board in developing markets where there is a poor governance framework (Idris et al., \u003cspan citationid=\"CR33\" class=\"CitationRef\"\u003e2018\u003c/span\u003e). Thus, the given study will explore this problem in the environment of the Jordanian industrial companies, where the corporate governance practices are in their infancy. Although the Jordan Securities Commission has developed regulations, according to which financial statements must be published in a timely manner, the facts prove that not all companies are able to meet these dates (Ishak \u0026amp; Nugraha, \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Such delays would prejudice transparency and lower the investor confidence in the financial statements. The literature in this area has provided inconclusive findings concerning the influence of audit committee characteristics on the timeliness of audit reports. The existence of this relationship is supported by some studies in which the relationship is approximated as high, whereas as other studies fail to find any relationship. Such inconsistency is an indicator that these differences could be attributed to numerous factors, including institutional ownership and regulatory pressure (Al-Qublani et al., \u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Alshammari, \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2024\u003c/span\u003e; Alsheikh and Alsheikh, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eThis study is both practical and theoretical. Theoretically, it helps to understand corporate governance because it addresses the issue of the impact of the institutional ownership on the connection between the characteristics of the audit committee and the promptness of audit reports, which have not been much examined in the context of emerging countries such as Jordan (Ishak \u0026amp; Nugraha, \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Practically, the results may assist the regulators, policymakers, and corporate boards to determine the factors that enhance financial reporting. As the Jordanian capital market is still developing, the availability of institutional investors and performance of audit committees can form the future policy and grow the confidence of investors. The findings also help in assisting the stakeholders to make informed decisions particularly on circumstances where governance systems and regulations are not at an advanced stage. In the following section, the theoretical framework and available literature will be reviewed. The research design, the data collection methods and the analysis methods will be delineated in the methodology section. Lastly, the paper will give the results, comment on the results and make recommendations and suggestions on what can be done practically and policies changed.\u003c/p\u003e"},{"header":"2. Review of Literature and Theoretical Background","content":"\u003cdiv id=\"Sec3\" class=\"Section2\"\u003e\u003ch2\u003e2.1. Effectiveness of the Audit Committee and Agency Theory\u003c/h2\u003e\u003cp\u003eThis study is based on Agency Theory since it is focused on the different problems, which are caused by the conflict of interest between the corporate management (agents) and shareholders. Such conflicts occur due to the separation of ownership and control, which causes the imbalance of information. To counter the same, several governance mechanisms are used to watch over the activities of the managers and make sure that they do what is in the greatest benefit of the shareholders (Frischanita, \u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e2018\u003c/span\u003e). Audit committee is one of the best known internal monitoring systems and is important to the integrity of financial reporting as well as adherence to the audit and accounting standards. Agency Theory believes that a robust audit committee can minimize the agency costs to help in making financial reporting more credible and reliable (Guo \u0026amp; Platikanov, \u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2019\u003c/span\u003e). Such committees must be independent, must possess professional skills and must be structured. They can enhance accuracy, transparency and speed of financial reporting when they are written well and have the authority to do so (Lajmi and Yab, \u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Le and Nguyen, \u003cspan citationid=\"CR41\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Maranjory and Tajani, \u003cspan citationid=\"CR42\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Musah et al., \u003cspan citationid=\"CR43\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec4\" class=\"Section2\"\u003e\u003ch2\u003e2.2. Timeliness of Audit Reports in Financial Governance\u003c/h2\u003e\u003cp\u003eThe quality of timeliness is also important in financial reporting, and the two frameworks that discuss the subject are International Financial Reporting Standards and Financial Accounting Standards Board frameworks. Audit reports timely delivery may be the measure that determines how efficient the financial reporting process of a company is. It can be defined as the number of days that pass between the end of one fiscal year and the day when an independent auditor has signed the audit report (Durand, \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e2019\u003c/span\u003e). Slowness in issuing audit reports may hurt market efficiency, diminish confidence of investors as well as decrease the transparency of corporate disclosures. The higher the audit lag, the more it may indicate poor internal control, technical audits, or bad governance (Juwita \u0026amp; Hariadi \u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). Conversely, shorter lags indicate that the audit is planned and conducted well, which is usually related to good governance mechanisms including well-functioning audit committees (Sulimany, \u003cspan citationid=\"CR51\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Sulimanyk, \u003cspan citationid=\"CR52\" class=\"CitationRef\"\u003e2024\u003c/span\u003e; Sultana et al., \u003cspan citationid=\"CR54\" class=\"CitationRef\"\u003e2015\u003c/span\u003e; Sultana et al., \u003cspan citationid=\"CR54\" class=\"CitationRef\"\u003e2015\u003c/span\u003e; Wan-Hussin and Bamahros, \u003cspan citationid=\"CR55\" class=\"CitationRef\"\u003e2013\u003c/span\u003e; Waris and Haji Din, \u003cspan citationid=\"CR56\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Yeboah et al., \u003cspan citationid=\"CR57\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Zaman et al., \u003cspan citationid=\"CR58\" class=\"CitationRef\"\u003e2011\u003c/span\u003e).\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec5\" class=\"Section2\"\u003e\u003ch2\u003e2.3. Audit Committee Characteristics in Earlier Empirical Studies\u003c/h2\u003e\u003cp\u003eResearch examining the connection between the characteristics of the audit committee and the timeliness of the audit report have been increasing. Generally, experts concur that such factors as independence, expertise, size, and frequency of meetings are significant. Most studies reveal that audit committee financial expertise and independence play an important role in eliminating audit delays (Lajmi \u0026amp; Yab, \u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). These results confirm Agency Theory or the idea that firm governance would minimize the information asymmetry and encourage timely information disclosure (Maranjory \u0026amp; Tajani, \u003cspan citationid=\"CR42\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Institutional ownership is also a factor that is believed by some researchers to be effective in improving audit committees particularly in shortening the period of issuing reports (Oradi, \u003cspan citationid=\"CR44\" class=\"CitationRef\"\u003e2021\u003c/span\u003e; Rifai and Siregar, \u003cspan citationid=\"CR46\" class=\"CitationRef\"\u003e2021\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eThis has been realised in other emerging markets. Variation in outcomes can be an indication of flaws in the government systems or regulatory loopholes within the developing economies, illustrating the necessity of local audit oversight models (Khan et al., \u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). Majority of other studies have examined other forms of corporate governance. As an example, the researchers in Kuwait and Indonesia have considered the board size, financial literacy, and family ownership (Ishaka et al., \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). According to their findings, the financial expertise of boards would prevent delays in the audition process, and family controlled companies tend to undergo the process of delay because of agency-related conflicts. This can be proven by the Agency Theory Type II that connects concentrated ownership to the negative performance of supervisory boards (Sakawa and Watanabel, \u003cspan citationid=\"CR47\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Shbeilat, \u003cspan citationid=\"CR48\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eModerating variables are also used in other studies in order to improve their explanations. An example is the study by Juwita \u0026amp; Hariadi (\u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e2020\u003c/span\u003e) which considered the interaction between audit firm size and audit committees, where the larger audit firms make the effect of the effective audit committees on timeliness growing, though not on internal audit units. On the same note, Frischanita (\u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e2018\u003c/span\u003e) examined institutional ownership along with gender among other aspects in three ASEAN countries and came up with the result that only institutional ownership has a significant effect of reducing audit delays, whereas committee characteristics and gender have minimal impacts. Audit report timeliness is already a well-researched subject internationally; however, hardly any research is done on the Jordanian industrial companies (Sakawa \u0026amp; Watanabel, \u003cspan citationid=\"CR47\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). Jordan is a growing economy that has changing governance systems, thus making it a unique institutional and regulatory framework that influences the correlation between the audit committees, ownership structure, and audit timeliness of reporting. Although regulatory authorities such as the Jordan Securities Commission implement policies that encourage timely financial disclosures and financial information dissemination, some companies adopt the practice better than others (Musa et al., 2023). Such a discrepancy causes questions regarding the efficiency of internal governance systems and the active involvement of shareholders in organizations surveillance. Consequently, there exists a manifest necessity of the empirical research targeting at the Jordanian industrial sector, in which the properties of firms and ownership structure deviate of the ones that are inherent to the developed markets (Singh et al., \u003cspan citationid=\"CR49\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Sulimany, \u003cspan citationid=\"CR50\" class=\"CitationRef\"\u003e2024\u003c/span\u003e).\u003c/p\u003e"},{"header":"3. Methodology","content":"\u003cp\u003e\u003cb\u003e3. 1 Introduction\u003c/b\u003e\u003c/p\u003e\u003cp\u003eThis section discusses methods in this study such as data collection and data analysis. We will also elaborate the target population of the study, selection of samples, and the means presented to either prove or refute the hypotheses. We shall also explain the statistical methods that shall be applied in processing the data and analyzing the relationships in a scientific, systematic and consistent manner that is inline with the objectives of the study.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec6\" class=\"Section2\"\u003e\u003ch2\u003e3.2 Study Design and Variables Measurement\u003c/h2\u003e\u003cp\u003eThe study concentrates on the entire industrial corporations listed in Amman Stock Exchange in Jordan. It examines the connection between the characteristics of an audit committee and audit report lag (ARL), however, it questions the institutional ownership as a factor that might affect such connection.\u003c/p\u003e\u003cp\u003eAudit Committee Independence (ACI): This is governed as a percentage of independent members in audit committee.\u003c/p\u003e\u003cp\u003eThe majority of the explanatory variables consist in:\u003c/p\u003e\u003cp\u003eAudit Committee Financial Expertise (ACFE): It is the proportion of the committee members with accounting, financial management or the banking educational or professional qualifications.\u003c/p\u003e\u003cp\u003eInstitutional Ownership (IO): It is the proportion of the stocks owned by institutional investors, and this is an indicator of the amount of control that the investors control the company.\u003c/p\u003e\u003cp\u003eAudit Committee Size (ACS): It is the number of members of the audit committee.\u003c/p\u003e\u003cp\u003eAudit Report Lag (ARL) is a number of days between the close of financial year and publishing of the external audit report.\u003c/p\u003e\u003cp\u003eOur variable of interest is this. The moderating variable is:\u003c/p\u003e\u003cp\u003eBoard Size (BS) is listed as a control variable since it has the potential to influence the speed of issuance of audit reports.\u003c/p\u003e\u003cp\u003eThe wider the boards can be the more oversight it is likely to deliver which in turn may cut down on time consumed on audit activity.\u003c/p\u003e\u003cp\u003eIn order to study these relations, the following regression models are applied:\u003c/p\u003e\u003cp\u003e\u003cb\u003eModel (1)\u003c/b\u003e:\u003c/p\u003e\u003cp\u003e\u003cb\u003eARL\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e \u003cb\u003e= a\u003c/b\u003e\u003csub\u003e\u003cb\u003e0\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e1\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eBS\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e2\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACS\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e3\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACI\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e4\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACFE\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;ε\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u003c/p\u003e\u003cp\u003e\u003cb\u003eModel (2)\u003c/b\u003e:\u003c/p\u003e\u003cp\u003e\u003cb\u003eARL\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e \u003cb\u003e= a\u003c/b\u003e\u003csub\u003e\u003cb\u003e0\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e1\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eBS\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e2\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACS\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e3\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACI\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e4\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACFE\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e5\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACS*IO\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e6\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACI*IO\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u0026thinsp;\u003cb\u003e+\u0026thinsp;β\u003c/b\u003e\u003csub\u003e\u003cb\u003e7\u003c/b\u003e\u003c/sub\u003e\u003cb\u003eACFE *IO\u003c/b\u003e\u003csub\u003e\u003cb\u003eit +\u003c/b\u003e\u003c/sub\u003e \u003cb\u003eε\u003c/b\u003e\u003csub\u003e\u003cb\u003eit\u003c/b\u003e\u003c/sub\u003e\u003c/p\u003e\u003cp\u003eIn order to achieve clarity and consistency the following are the main constructs and their definition (Ebaid, \u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Fariha et al., \u003cspan citationid=\"CR29\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Farumi et al., \u003cspan citationid=\"CR30\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Hasan et al., \u003cspan citationid=\"CR34\" class=\"CitationRef\"\u003e2022\u003c/span\u003e);\u003c/p\u003e\u003cp\u003eAttributes of Audit Committee: This incorporates structural and functional attributes that have:\u003c/p\u003e\u003cp\u003eIndependence: The proportion of non-executive or independent members in the committee.\u003c/p\u003e\u003cp\u003eSize: How many individuals are on the audit committee.\u003c/p\u003e\u003cp\u003eFinancial Expertise: The availability of members with academic or professional experience in accounting or in finance.\u003c/p\u003e\u003cp\u003eAudit Report Timeliness: This is the number of days between the last day of financial year and the date in which the independent auditor puts out the report.\u003c/p\u003e\u003cp\u003eOwnership Structure (Institutional Ownership): This is the share that is held by the institutional investors such as a bank, insurance firms and investment funds.\u003c/p\u003e\u003cp\u003eThese are investors who are supposed to monitor, and they can affect the behavior of the management.\u003c/p\u003e\u003cp\u003eBoard Size: This is the total amount of members on the board. The bigger the board, the positive or a negative impact it can have on the monitoring effectiveness.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec7\" class=\"Section2\"\u003e\u003ch2\u003e3.3 Research Hypotheses\u003c/h2\u003e\u003cp\u003eIn order to answer the research questions and to achieve the objectives of the study, the below null hypotheses are proposed:\u003c/p\u003e\u003cp\u003eH 0 1 The independence of audit committee does not significantly influence the timeliness of audit report of the Jordanian industrial companies.\u003c/p\u003e\u003cp\u003eH02: No statistically significant difference exists between the effect of audit committee size and timeliness of audit report of the Jordan industrial companies.\u003c/p\u003e\u003cp\u003eH03: Investigation of the impact of audit committees financial expertise on timeliness of audit report in industrial companies in Jordan is less important.\u003c/p\u003e\u003cp\u003eH04: Institutional ownership does not play any significant role in mediating the connection amid the audit committee independence and the timeliness of the audit report.\u003c/p\u003e\u003cp\u003eH 05: Institutional ownership does not play a significant moderating role between the relationship of audit committee size and the audit report timeliness.\u003c/p\u003e\u003cp\u003eH 06: Institutional ownership has no significant effect on the relation between audit committee financial expertise and audit report timeliness.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec8\" class=\"Section2\"\u003e\u003ch2\u003e3.4 Population and Sample\u003c/h2\u003e\u003cp\u003eThe population will be all the 46 industrial publicly listed companies in the Amman Stock Exchange in 2023. The final sample consisted of 39 companies that satisfied the following criteria: The company was listed on ASE First Market all through the study period. No trading suspension occurred in the study period. Seven companies were disqualified because of missing data or inability to fit the above requirements.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec9\" class=\"Section2\"\u003e\u003ch2\u003e3.5 Data Collection Sources\u003c/h2\u003e\u003cp\u003eThe audit of the annual financial statements of listed industries companies used by the research was based on secondary information, obtained through the official ASE site. Additional material was also consulted in order to substantiate the literature review and theoretical framework such as peer-review journal articles, theses, and books.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec10\" class=\"Section2\"\u003e\u003ch2\u003e3.6 Statistical Analysis Methods\u003c/h2\u003e\u003cp\u003eThe hypotheses of the study were examined by the following statistical methods so that the research objectives were attained:\u003c/p\u003e\u003cp\u003e\u003cstrong\u003eDescriptive Statistics\u003c/strong\u003e\u003cp\u003eThis has been employed to describe the main characteristics of the variables by giving the measures such as mean, standard deviation, minimum, and maximum, hence giving a vivid view of the distribution of the data.\u003c/p\u003e\u003c/p\u003e\u003cp\u003e\u003cstrong\u003eRegression Analysis\u003c/strong\u003e\u003cp\u003eA multiple linear regression model was applied to consider the influence of characteristics of the audit committee on ARL and to test whether institutional ownership had any moderating powers or not. All the major assumptions of regression were tested before the analysis (the normality of residuals, and the multicollinearity). Statistical calculations were made on SPSS software which is also efficient in working with data sets and carrying out complex calculations.\u003c/p\u003e\u003c/p\u003e\u003c/div\u003e"},{"header":"4. Hypotheses Testing and Data Analysis","content":"\u003cp\u003eIn this part of the paper, the findings of statistical tests that support or reject the research hypotheses and learn about the relationship between the characteristics of an audit committee and the timeliness of audit reports will be presented. At the end of the section, the five sections are formed: descriptive statistics, multicollinearity and autocorrelation diagnostics, testing of hypothesis concerning the direct effect, moderation analysis, and conclusion concerning the main findings of the chapter.\u003c/p\u003e\u003cdiv id=\"Sec12\" class=\"Section2\"\u003e\u003ch2\u003e4.1 Descriptive Statistics\u003c/h2\u003e\u003cp\u003eDescriptive statistics indicate the overview of variables which have been studied and form the basis of more complex statistical analysis. The mean, standard deviations and ranges of the independent, dependent, moderator and control variables are presented in Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eThe descriptive statistics for all study variables\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"5\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eVariable\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eMean\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eStandard Deviation\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eMinimum\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003eMaximum\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e3.48\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.67\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e3.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e6.00\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACI\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.53\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.18\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.33\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e1.00\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACFE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.57\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.17\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.33\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.80\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eARL in days\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e54.02\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e24.27\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e6.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e183.00\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eIO\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.12\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.18\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.63\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eBS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e7.56\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e2.12\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e7.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e13.00\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eAs the Table \u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e indicates, the mean audit committee size in the Jordanian industrial companies was 3.481. This implies that majority of firms implement the governance principle established by the Jordan Securities Commission that stipulates the audit committee needs at least three members. The fact that the standard deviation is low (0. 671) however indicates that most of the committees are created based on this rule with little variance hence more rule-based rather than performance-based. The audit committee independence (ACI) was captured at 52.6 percent, which implies that the number of members was above 50 percent. Though this is a demonstration of reasonable compliance with the local governance codes, it is not compliant with the global standards which tend to recommend a higher degree of independence, including two-thirds. Lack of independence may possibly influence the capacity of the committee in overseeing the management and may contribute to delays in financial reporting.\u003c/p\u003e\u003cp\u003eThe mean percentage of the financial expertise (ACFE) was 57.3 percent. This indicates that there is increased awareness of the need of financial knowledge as audit committee. Such expertise enables the members of the firm to have a better grasp of complex accounting matters and the ability to solve them as well as cooperate with other auditors leading to more effective audits. The dependent variable which is audit report lag (ARL) had an average of 54.02 days, a large standard deviation (24. 265) and a maximum lag of 183 days. This dispersion shows that there is a wide difference amongst companies on their speed of issuing audit reports. Although the position of Jordanian businesses is a bit better compared to Saudi Arabia where the mean ARL amounts to 58 days, there is still a lot to be done.\u003c/p\u003e\u003cp\u003eInstitutional ownership (IO) was considerably low averaging at 11.9 percent. This implies that the Jordanian industries do not have much presence of highly advanced investors. This observation is worrying as this may mean monitoring and accountability to the management who are supposed to focus on quality governance and timely reporting. These results conform to the agency theory that indicates that independence and professional competence deficiencies may aggravate the agency issues and cause delays in auditing. Besides, resource dependency theory identifies that presence of competent and expert members in audit committees would increase effectiveness in governance.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec13\" class=\"Section2\"\u003e\u003ch2\u003e4.2 Multicollinearity and Autocorrelation Diagnostics\u003c/h2\u003e\u003cp\u003eDiagnostic tests were done to make sure that the regression analyses are adequate by verifying the multicollinearity and autocorrelation. The findings of both Variance Inflation Factor (VIF) test and Durbin-Waston test are presented in Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eThe VIF results for all independent variables in both models\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"3\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eVariable\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eVIF (Model 1)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eVIF (Model 2)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e1.42\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e1.89\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACI\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e1.37\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e1.74\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACFE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e2.08\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e2.38\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eIO\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u0026ndash;\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e3.13\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eBS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e1.46\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e1.67\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eAll of the independent variables possessed VIF values that were not more than 4, which is the limit of the issue of multicollinearity. This implies that the variables analyzed are independent enough to give the regression coefficients. Durbin-Watson statistics of Model 1 (2.281) and Model 2 (2. 375) were near to ideal 2 which shows that there is no significant autocorrelation in the residuals. These findings validate the fact that the regression models are robust and that the estimators involved are unbiased and as such, the hypothesis testing will be reliable.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec14\" class=\"Section2\"\u003e\u003ch2\u003e4.3 Hypothesis Test: H1-H3\u003c/h2\u003e\u003cp\u003eThe initial set of hypotheses examined the relation between the nature of the audit committee and the timeliness of the audit report directly. Multiple linear regression was performed and the results are depicted in Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eThe results of multiple liner regression for hypotheses H1-H3.\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eVariable\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003et-value\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eSig. (p-value)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eCoefficient\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e1.62\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.38\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACI\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e-1.29\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.04\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.59\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACFE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e-2.37\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.02\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e1.63\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eBS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e1.82\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.05\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e3.28\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003e.\u003c/p\u003e\u003cp\u003eThe regression analysis indicated that the correlation between audit committee independence (ACI) and audit report lag (ARL) was highly negative, whereas the p-value was 0.040. It implies that greater independence of the audit committees has higher chances of minimizing delays in issuance of audit reports. Without being too much influenced by the management, members can conduct a more objective review, object to the management decision where it is necessary and assist in making the financial reporting process efficient. Such independence assists in establishing confidence in the audit process, and it is, therefore, more effective in bridging the gap between the management of the company and the external auditors. This observation supports the theory of agency according to which independent directors can curb the conflict of interests by paying attention to the interests of shareholders and setting high standards in financial reporting.\u003c/p\u003e\u003cp\u003eAudit committee size (ACS) on the other hand had a very strong positive correlations with ARL (p\u0026thinsp;\u0026lt;\u0026thinsp;0.001) that is, the larger the audit committee the more likely to delay. It is valid that larger committees have an advantage of more opinions and experience in addition to the fact that they are at risk of creating coordination problems as well as slowing the process of decision making. Bigger groups can lead to the lack of accountability, ineffectiveness, and problems with communication, particularly in regions where the system of governance has not been established completely, e.g., in Jordan and most Arab emerging markets. This observation confirms that of earlier studies indicating that past a definite size, committees will become counterproductive and more problems in the form of inefficiencies may arise than the benefits.\u003c/p\u003e\u003cp\u003eAlso, the outcomes indicated a high negative correlation between audit committee financial expertise (ACFE) and ARL (p\u0026thinsp;=\u0026thinsp;0.020). This means that the greater the financial literacy of the committee members, the easier it is to watch the audit process and make sure that the financial reports are done on time. Financial expertise will help the members of the committee to comprehend difficult financial issues, ask the necessary questions and effectively communicate with the external auditors. This result shows the theory of resource dependency that emphasizes on the significance of professional knowledge in the structures of governance. Without these skills, committees might not work effectively with auditors hence new audit reports might not be realised on time (Ishak and Nugraha, \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Ishaka, et al. 2023; Jiang et al., \u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Juwita and Hariadi, \u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Khan et al., \u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e2020\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eOverall, the results make it possible to draw significant governance implications that concern the audit committee size as a quantitative measure of compliance. Nonetheless, the greater influences are with independence and financial expertise as qualitative indicators of timeliness of auditing. As such, regulators and policymakers in the emerging economies such as Jordan are advised to change their emphasis on numerical requirement and shift towards independence and competence of the audit committee. Qualitative approach may enhance the efficiency of governance and make sure that audit committees succeed in carrying out their responsibilities in safeguarding the quality of financial reporting.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eResults of multiple linear regression for hypotheses H4\u0026ndash;H6\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eVariable\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eT\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eSig. (p-value)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eCoefficient\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e1.77\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.41\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACS \u0026times; IO\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e-5.73\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.55\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e-0.48\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACI\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e-2.44\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.62\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e-1.69\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACI \u0026times; IO\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e-7.06\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.73\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e-3.74\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACFE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e-3.57\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.03\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e-1.78\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eACFE \u0026times; IO\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e-6.10\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.04\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e-4.13\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eBS\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e2.75\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.01\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e4.65\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec15\" class=\"Section2\"\u003e\u003ch2\u003e4.4 Moderation Analysis: H4 to H6\u003c/h2\u003e\u003cp\u003eThe second set of the hypotheses was applied to determine whether institutional ownership (IO) has an impact on the relationship between the characteristics of the audit committee and the timeliness of an audit report. We included interactions in the regressions and the result was presented in Table\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e4\u003c/span\u003e. The moderation analysis was performed to see whether the institutional ownership (IO) influences the relations between the characteristics of the audit committee and the timeliness of the audit report (ARL). The findings were interesting although not so strong with regard to the three hypotheses. On the one hand, the association of audit committee independence (ACI) and institutional ownership was not significant (p\u0026thinsp;=\u0026thinsp;0.730), meaning that the presence of institutional investors does not make an independent audit committee more or less effective in respect of timely audit reports. This implies that institutional investors who own shares in Jordanian companies cannot be effective to enable the independent directors perform their oversight task properly. This is possibly due to fact that moderate involvement of institutional investors in emerging markets is less active and they do not wish to enter directly into the corporate governance activities to retain good relation with the management. This contrasts with that is experienced in the comparatively mature economies where institutional investors are more engaged in accountability of the companies through the use of their equity shares and timely reporting of their financial position (Chronopoulos et al., \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e2024\u003c/span\u003e; Dang and Nguyen, \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2022\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eSecond, the effect of the interaction between audit committee size (ACS) and institutional ownership was also not significant (p\u0026thinsp;=\u0026thinsp;0.549). This indicates that institutional investors do not have an effect on the committee size and the timeliness of audit reports. The presence of direct and positive influential effect of ACS on ARL revealed in the previous stage is not changed, which proves the hypothesis that bigger committees may not be more effective, despite the institutional investors that control them. This finding indicates that institutional investors in Jordan might not be disposed or have the capacity to question ineffective governance style like the oversized audit committee which makes governance of corporations very difficult. Conversely, audit committee financial expertise (ACFE) and institutional ownership were also found to have an impressive interaction (p\u0026thinsp;=\u0026thinsp;0.035). It implies that the beneficial effect of financial expertise on timeliness of audit is reinforced by institutional investors. It reveals that the availability of institutional investors enables effectively performing the duties of the audit committees by its members who are financially knowledgeable and hence generates a superior environment of governance. This conclusion corresponds with the resource dependency theory whereby the technical knowhow and external assistance in the progress of organizations are emphasized. It also implies that possibly institutional investors in Jordan can give more concentration on technical expertise as it is their financial interests that rely on the same and thus can be more interested in the governance concerns of an area regarding the same (Boshnak, \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e2023a\u003c/span\u003e; Boshnak, \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e2023b\u003c/span\u003e; Chen et al., \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Chen et al., \u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2018\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eIn theory, these findings correspond with prior studies that demonstrate the way in which institutional investors engage in corporate governance across different contexts. Indicatively, in their research Khan et al. (\u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e2020\u003c/span\u003e) concluded that, in numerous developing economies, institutional investors usually pay more attention to financial skills and the quality of audit rather than structural characteristics of governance. The same tendency could be observed in Saudi Arabia: Ebaid (\u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) discovered that institutional investors were more inclined to approve governance reforms that did not prioritize independence and size of committees but instead, emphasize technical competence. All in all, the moderation analysis indicates that policymakers in Jordan and other Arab states ought to embark on moderating institutional investors by taking measures to empower institutional investors via regulation. This would make them more active and establish a culture of governance which would make them active in the process. The potential of institutional ownership on enhancing the effectiveness of the audit committee would not be feasible without this support (Basuony et al., \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e2016\u003c/span\u003e; Bataineh, \u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e2021\u003c/span\u003e; Bazhair, \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2022\u003c/span\u003e Bazhair, \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Bhuiyan and D\u0026rsquo;Costa, \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2020\u003c/span\u003e).\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec16\" class=\"Section2\"\u003e\u003ch2\u003e4.5 Summary of the Section\u003c/h2\u003e\u003cp\u003eThis part shows the results of the descriptive and inferential test to test the hypotheses of the study. The findings are the most pronounced on how the characteristics of the audit committee- size, independence, and financial experience affect the timeliness of the audit reports in the Jordanian industry companies. There was a strong negative correlation between the audit report lag and audit committee independence as well as financial expertise. This implies that they are a major player in enhancing the efficiency of audit. Conversely, the findings indicated that bigger audit committees used to postpone the issuance of the audit reports, which indicates that at one point, the bigger audit committees might not be more effective regarding the governance issues. The sensitivity test indicated that institutional ownership has a partial effect on the connection between the qualities of the audit committees and the auditing timeliness. The two-sided test of significance showed that financial expertise had a significant and positive influence and independence and the size had no influence. This implies that, despite the fact that institutional investors might be quite useful in success of technically competent audit committees, there might not be much they can contribute in other aspects because of the nature of emergent markets. Overall, such results justify the necessity of a balance between the composition of audit committees and empowerment of institutional investors. This is a balance that is crucial in the promotion of corporate governance as well as the timely reporting of financial statements (Alves, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Alzoubi, \u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Astami et al. \u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2024\u003c/span\u003e; Bajary et al., \u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e2023\u003c/span\u003e ).\u003c/p\u003e\u003c/div\u003e"},{"header":"5. Discussion, Recommendations and Future research","content":"\u003cp\u003eThis part will relate the findings of the study with the knowledge that is already available in regard to corporate governance. The results will be contrasted with those of the earlier researches in Jordan and other related regions in the Arab world. In addition, some of the practical suggestions and future research ideas will be given.\u003c/p\u003e\n\u003cdiv id=\"Sec18\" class=\"Section2\"\u003e\n \u003ch2\u003e5.1 Findings Discussion\u003c/h2\u003e\n \u003cp\u003eThe present paper examined the influence of the specifics of an audit committee such as its size, the extent to which the members are independent and the financial expertise on the rate of the audit reports completion (ARL). It also discussed the effect that the institutional ownership has in these Jordanian industrial firms. The analysis indicated that independence and financial knowledge contributed in mitigating ARL, whereas too many members on the committee mostly caused delays in reporting. Such findings support the agency theory, which argues that, independent directors enhance monitoring and reduce the cost associated with conflicts of interest thus, resulting in a more efficient audit procedure. The relationship between financial knowledge and time to process audit reports is also consistent with the resource dependency theory as the members with financial knowledge make things run smoothly with the outside auditors, and problems get solved on a timely basis. Yet the association relating higher audit committees with longer publication times should indicate that a larger committee may not necessarily be superior. It may lead to issues of coordination and it would be difficult to hold people accountable which would negatively affect governance. This demonstrates that a high degree of balance should be attained instead of a big committee. When we examined the effect of institutional ownership in the section where we tested the effect of institutional ownership on such relationships, it was found that institutional ownership aided us in many respects when we talked about financial knowledge and report speed but had little impact on the effect of committee size or independence on report speed. This implies that in such countries as Jordan, institution investors might emphasize more on financial skills than committees structure and independence.\u003c/p\u003e\n\u003c/div\u003e\n\u003cdiv id=\"Sec19\" class=\"Section2\"\u003e\n \u003ch2\u003e5.2 Practice Implications\u003c/h2\u003e\n \u003cp\u003eThe paper demonstrates that regulators need to appreciate qualitative features of governance, including, being financially literate and independent audit committee instead of mere size of the audit committee. In the case of institutional investors, the findings indicate the participation in audit committees by the institutional investors with financial competence would enhance the governance outcomes. To corporate boards, the research reveals the relevance of seeking proper balance between committee size, independence and financial expertise that would make audit more speedy and efficient.\u003c/p\u003e\n\u003c/div\u003e\n\u003cdiv id=\"Sec20\" class=\"Section2\"\u003e\n \u003ch2\u003e5.3 Practice tips\u003c/h2\u003e\n\u003c/div\u003e\n\u003cp\u003e1. The members of the audit committee of a company should be kept financially literate and independent.\u003c/p\u003e\n\u003cp\u003e\u003cspan\u003e\u003c/span\u003e\u003c/p\u003e\n\u003cp\u003e2. In some countries such as Jordan, institutional investors should be pushed to participate more in corporate governance.\u003c/p\u003e\u003cspan\u003e\n \u003cp\u003e3. The size of the audit committees should not be very large since they can cause problems and act as a performance deterrent.\u003c/p\u003e\n\u003c/span\u003e\n\u003cp\u003e\u003c/p\u003e\n\u003cdiv id=\"Sec22\" class=\"Section2\"\u003e\n \u003ch2\u003e5.4 Recommendations of Future Studies\u003c/h2\u003e\n \u003cp\u003eFurther research may examine the influence of other elements of governance as, e.g., the participation of the CEO as a board member or the level of board diversity on the timeliness of audits. Several studies are also possible to compare the role of institutional investors in the emerging markets and in the developed one. Time-based longitudinal studies could assist in the comprehension of the efficiency of audit committees as new governance regulations are taking place.\u003c/p\u003e\n\u003c/div\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003ch2\u003eConflict of Interest\u003c/h2\u003e\u003cp\u003e\u003cem\u003eThe author declares that there is no conflict of interest regarding the publication of this article.\u003c/em\u003e\u003c/p\u003e\u003c/p\u003e\u003ch2\u003eFunding\u003c/h2\u003e\u003cp\u003eThis research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.\u003c/p\u003e\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eAuthors\u0026rsquo; Contribution StatementM.D. (Mustafa Dawas) contributed to the conceptualization of the study, the development of the research framework, and the final revision of the manuscript.Y.A.S. (Yousef Abu Siam) was responsible for data collection, statistical analysis, and interpretation of the results.M.N. (Mahmoud Nassar) participated in the literature review, drafted significant portions of the manuscript, and assisted in editing and formatting.K.M. (Khalil Miner) contributed to the methodology design, validated the data analysis process, and reviewed the manuscript for intellectual content.All authors read and approved the final version of the manuscript.\u003c/p\u003e\u003ch2\u003eData Availability\u003c/h2\u003e\u003cp\u003eThe datasets generated and/or analyzed during the current study are available from the corresponding author on reasonable request.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eAbbas A, Frihatni H (2023) The Impact of Audit Committee Characteristics on Audit Report Timeliness: Evidence from Emerging Markets. 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J Bus Finance Acc 38(1\u0026ndash;2):165\u0026ndash;197 Copyright Disclai\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Audit Committee Characteristics, Audit Report Lag, Institutional Ownership, Corporate Governance, Jordanian Industrial Sector","lastPublishedDoi":"10.21203/rs.3.rs-7206796/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7206796/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003ch2\u003ePurpose\u003c/h2\u003e\u003cp\u003eThe purpose of paper is to investigate the effect of some characteristics of the audit committee, including size, independence, and financial expertise, on the audit report lag in industrial companies in Jordan. It also verifies whether the institutional ownership level influences the connection between these traits of the audit committee and the period that could be used to release audit reports.\u003c/p\u003e\u003ch2\u003eResearch/Methodology/Approach:\u003c/h2\u003e\u003cp\u003eThe study is quantitative in nature and relies on the figures using the annual financial statements of 39 listed industrial companies on the Amman Stock Exchange in 2019\u0026ndash;2023. In order to test the concepts, multiple linear regression models are employed. It also inspects the data using descriptive statistics and diagnostic tests to ensure reliability of the results. Additional variables such as board size are incorporated so as to make the results more precise.\u003c/p\u003e\u003ch2\u003eResults\u003c/h2\u003e\u003cp\u003eThe results indicate that size and financial knowledge of audit committee are two of the features that have a large effect on the speed at which audit reports are published. In addition, institutional ownership contributes to the increased strength of this impact. The key lesson is that good corporate governance practices are relevant in enhancing efficiency of financial reporting.\u003c/p\u003e\u003ch2\u003ePractical Implications:\u003c/h2\u003e\u003cp\u003eThe study can be used by policymakers, those concerned with regulations, and policymakers involved in corporate governance in the developing nations. Companies can accelerate the release of audit reports and render the financial information more transparent by enhancing the composition and qualification of the audit committees and motivating the active participation of the institutional investors.\u003c/p\u003e\u003ch2\u003eOriginality/Value:\u003c/h2\u003e\u003cp\u003eThis study adds to the current knowledge because it uses institutional ownership in the determination of the impact of the characteristics of the audit committee on audit report lag. It offers a real-life evidence of a developing country, discussing the role of the institutional investors in lessening the problems between the company management and the shareholders and also accelerating the financial reporting.\u003c/p\u003e","manuscriptTitle":"The Moderating Effect of the Ownership Structure on Audit Committee Characteristics and Audit Report Lag: Evidence from Jordan","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-09-06 07:29:28","doi":"10.21203/rs.3.rs-7206796/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"22e21fb2-4440-48c2-b7eb-1c27d4eee7d1","owner":[],"postedDate":"September 6th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[{"id":53946801,"name":"Business and commerce/Business and management"},{"id":53946802,"name":"Social science/Business and management"},{"id":53946803,"name":"Business and commerce/Finance"},{"id":53946804,"name":"Social science/Finance"}],"tags":[],"updatedAt":"2025-10-07T09:39:08+00:00","versionOfRecord":[],"versionCreatedAt":"2025-09-06 07:29:28","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-7206796","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-7206796","identity":"rs-7206796","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}