Determinant of Audit Report Lag: Profitable and Financial Difficulty, Firm size as Moderator

Audit report lag represents a significant concern for all entities registered on Indonesia Stock Exchange (IDX), as a shorter lag period positively influences company operations. However, several factors contribute to extended audit durations. Notably, company profitability tends to streamline audits compared to firms facing financial distress, which typically encounter prolonged audit processes. Moreover, company size plays a crucial role; larger firms generally exhibit more robust management practices than smaller counterparts. This study investigates the impacts of profitability of the entities and financial distress, with firm size as moderator, on audit report lag. Utilizing secondary data sourced from financial reports spanning 2021 to 2023, the research focuses on healthcare sector entities registered on Indonesia Stock Exchange (IDX). A purposive sample of 23 entities were selected, and analyzing method being used is Moderated Regression Analysis (MRA) which is conducted via SPSS version 26. The findings reveal that profitability positively influences audit report lag, whereas financial distress exerts a negative impact. Firm size moderates the relationships between profitability and audit report lag, in addition between financial distress and entities’ audit report lag. These insights contribute novel perspectives to the field and suggest avenues for future research, including the incorporation of additional variables, extension of the study period, and enlargement of the sample size.