Convergence to IFRs and Audit Report Lag in Malaysia

Abstract

The Financial Reporting Foundation (FRF) and the Malaysian Accounting Standards Board (MASB) have decided to bring Malaysia to full convergence with the International Financial Reporting Standards (IFRS) by 1^st January 2012. This has inspired the study to investigate the effect of the convergence of IFRS proxied by the implementation of new accounting standards (FRS 4, 7, 123 & 139) on the audit report lag (ARL) in Malaysia since the requirement of the IFRS is much complicated. The samples of the study were drawn from the public listed companies on the main market of Bursa Malaysia. The study reveals that the ARL increases as new accounting standards implemented. Significantly, the ARL in Malaysia is found to be longer compared to other developed and developing countries.

Keywords: IFRS, Audit Report Lag, Malaysia