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Influencing Factors:The Timeliness of Financial Reporting Submissions

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DOI: 10.11114/bms.v5i1.4144

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 Business and Management Studies
Vol. 5, No. 1; March 2019
ISSN: 2374-5916 E-ISSN: 2374-5924
Published by Redfame Publishing
URL: http://bms.redfame.com

Influencing Factors:The Timeliness of Financial Reporting Submissions

Enni Savitri1, Andreas1, Raja Adri Satriawan Surya1
1
Department of Accounting, Faculty of Economics and Business, Universitas Riau, Kampus Bina Widya Km. 12.5,
Simpang Baru, Tampan Pekanbaru, Riau, Indonesia
Correspondence: Enni Savitri, Department of Accounting, Faculty of Economics and Business, Universitas Riau, Kampus
Bina Widya Km. 12.5, Simpang Baru, Tampan Pekanbaru, Riau, Indonesia.

Received: February 11, 2019 Accepted: March 5, 2019 Online Published: March 14, 2019
doi:10.11114/bms.v5i1.4144 URL: https://doi.org/10.11114/bms.v5i1.4144

Abstract
The purpose of this study was to examine the effects of profitability, leverage, firm size, outsider ownership, the reputation
of the public accounting firm and financial risk on the timeliness of financial report submissions. This study used a sample
of all the trade, services and investment companies listed in Indonesia Stock Exchange in 2014-2016. A total of 78
companies were examined. Multiple linear regression was used to test the hypotheses. Results showed that profitability,
outsider ownership, the reputation of the public accounting firm and financial risk had significant effects on the timeliness
of financial report submissions, but leverage and firm size did not have the effect. The originality of this paper is proven
by that sample used of trade, service and investment companies and by using the measure of an auditor’s reputation. Both
of which had been studied earlier. The implications from this study for regulators is that regulations can be better
determined to oversee and ensure a high standard from the financial reporting mechanism in the Indonesia Stock Exchange.
Keywords: profitability, leverage, firm size, outsider ownership, reputation of the audit firm, financial distress
1. Introduction
Companies need actual information in running a business. Actual information can provide accurate information relevant
to current business conditions. Information is said to be relevant if the information can make a difference in making a
decision. The most important information in the field of finance for a business is information in the form of financial
statements or reports. The financial report is the final stage of the accounting process and plays an important role in
measuring and evaluating the performance of a company. Financial statements contain records of business activities
carried out by an entity within a certain period (Vuran dan Burcu, 2013). Companies in Indonesia, especially companies
that are public entities, are required to prepare financial statements for each period. According to the Indonesian
Association Accountants (IIA, 2013), the purposes of financial reports are to provide information on the financial position,
financial performance, and cash flow. This report is useful for most report users in making economic decisions. Financial
reports also have an important role as a means of communication between business people (Mannan et al., 2017).
Currently companies that are registered as public companies are required to submit financial reports to the public. The
capital market regulation No.29 / PJOK.04 / 2016 states that public companies must submit an annual report to the
financial services authority (FSA) no later than the end of the fourth month after the end of the financial year. The
Indonesia Stock Exchange (IDX) hand out sanctions to public companies for the late submission of audited financial
reports beyond the prescribed time limit. The regulation shows the intention of the FSA and IDX in cracking down on all
companies that are late in submitting their financial reports. This is enforced to maintain the compliance of the listed
companies, for the companies must fulfill the securities listing provisions and ensure information is disclosed to the public.
This disclosure creates orderly, fair and efficient trade. All of these regulations are designed to ensure companies submit
financial reports under the applicable regulations. The FSA at this time has determined there are still many companies
that are not disciplined in their implementation of the regulations. The fact is there are still companies that are late in
submitting their financial reports.
The purpose of this study was to analyze the effect of profitability, leverage, the size of the company, outsider ownership,
public accounting firms reputation and financial risk on the timely submission of financial reports. Results showed that
profitability, outsider ownership, the reputation of the public accounting firm and financial risk had significant effects on
the timeliness of financial report submissions, but leverage and firm size did not have an effect. The results of this study
will help identify and provide information about factors that influence the timeliness of financial reporting submissions

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and this has great implications for financial statement analysts, company management practitioners, investors and
creditors. This will help regulators to provide information about the impact of regulations from the deadline for publishing
annual financial statement.
1.1 Conceptual Framework
Agency theory assumes that all individuals act on their behalf (Jensen & Meckling, 1976). Shareholders as principal
parties are assumed only to be interested in increasing financial results or their investment in the company while it is
assumed that the agents receive satisfaction in the form of financial compensation and the conditions that accompany the
relationship (Alzoubi, 2016).
Signaling theory uses asymmetric information between companies and outsiders. Management personnel know more
about the company's prospects and future opportunities than outside parties (investors). Information asymmetry will occur
if management does not fully convey all information that can affect the company's value to the capital market (Bergh et
al., 2014). To avoid asymmetric information, companies must provide information as a signal to investors. Asymmetrical
information needs to be minimized, so public companies must give the company financial information in a transparent
manner to investors (Saqer, 2015).
Timeliness implies that financial statements should be presented at a specific time interval and so explains changes in
companies listed on the Stock Exchange which might affect information investors’ use in making predictions and
decisions (Puasa et al. 2014). Emeh and Appah (2013) showed that financial information users must be able to obtain the
information they need at the right time especially if they are in a position of making or anticipating decisions. In this
context, the timing of the information is as important as the content for the users of financial information. Information
users regard financial reporting time as an important factor of accounting information (Ismail and Roy, 2015).
Profitability is one indicator of the company's success to generate profits. When a company’s profitability increases the
company's ability to generate profits is higher. Profitability is the ability of a company to create profits in the areas of
sales, assets and share capital. Profitability is the net result of a series of policies and decisions (Brigham and Houston,
2014). Profitability is often used as a benchmark by investors and creditors in assessing whether a company is healthy or
not (Al Daoud et al., 2014).
According to Niswonger (2008), leverage ratios measure the level of corporate assets that have been financed by the use
of debt. The high ratio of debt to equity reflects the high risk of the company. This high risk indicates the possibility that
the company cannot pay-off it’s obligations or debts in the form of principal or interest payments (Putri, 2015).
Company size can be measured from several aspects. It can be based on the total assets value, total sales, market
capitalization, number of workers, and so on (Niresh and Velnampy, 2014). The greater the assets of a company, the
greater is the invested capital, the greater the total sales of a company, the more money will be turned-over and the larger
the market capitalization and the greater the company will be known by the public (Ika and Ghazali, 2012).
Ownership structures are very important in determining company value. There are two aspects of ownership that need to
be considered, namely ownership by an outside party and ownership by an internal party. The share ownership structure
that is owned by an outside party usually has a percentage of ownership of more than 50%, so that the owner of the
company from outside the company has great power in influencing the conditions and results of the company's work
(Zaitul, 2010).
Public Accounting Firms are institutions that have permission from the Finance Ministry to be avenues for public
accountants to carry out their work. A large and well-reputed public accounting firm is usually indicated by Public
Accounting Firms (PAF) that is affiliated with a universal accounting firm known as the Big Four Worldwide Accounting
Firm (Big 4). Large public accounting firms are often referred to as having a better reputation in public opinion. This is
because compared to small public accounting firms; large public accounting firms accountants normally have to behave
more ethically (Ika and Ghazali, 2012).
A company is said to experience financial risk if the company has difficulty closing or fulfilling obligations to the company,
it begins with minor difficulties to more serious difficulties. Ross (2010) asserts that financial risk could lead to financial
distress if the company is unable to manage it. Financial risk is related to the ability of the firm in meeting all its obligation
to the external parties in the form of debt. The level of financial risk can be seen from the company’s level of leverage.
The higher the leverage ratio, the higher the financial risk of the company and thus the higher the potential for facing
financial distress.
1.2 Hypotheses Development
1.2.1 Effect of Profitability on the Timeliness of Financial Report Submissions
Profitability shows the successfulness of a company to make a profit. Profit is good news for a company. A company will

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not delay in delivering information that contains good news. Companies that can generate profits will tend to be timelier
in the delivery of financial statements when compared to companies that report losses. Profits are good news for
companies, so companies tend not to delay reporting on financial information. Studies by Sanjaya and Ni Gusti (2016)
and Mannan et al. (2017) showed that profitability affects the timeliness of financial report submission.
Referring to the description above, the hypothesis is stated as follows.
H1: Profitability affects the timeliness of financial report submissions
1.2.2 The Effect of Leverage on the Timeliness of Financial Report Submissions
According to Putri (2015), leverage ratios measure the level of corporate assets by the level of debt incurred. Companies
that have higher leverage are companies that depend on external loans to finance their assets. Financial difficulties are
considered bad news and will affect the position of the company by the public. This gives a negative signal for investors
and stops them from investing in stocks. High financial difficulties mean the company management urges auditors to find
convincing evidence that the company's financial statements are free from material misstatement. This work requires a
longer audit time. The extra length of time taken for the audit results in the company not being able to submit their
financial reports on time. Previous researches conducted by Mannan et al. (2017), Sanjaya and Ni Gusti (2016), and
Dogan et al. (2007) showed that leverage affects the timeliness of submitting financial reports.
Referring to the description above, the hypothesis to be tested is stated as follows.
H2: Leverage affects the timeliness of financial report submissions
1.2.3 Effect of Company Size on Timeliness of Financial Report Submissions
Firm size indirectly determines the ability of a company to produce profits. In Signalling theory, the size of a company
can provide a good signal to investors. Companies that have a large size tend to maintain their image and comply with
regulations, so investors receive a signal that the company's performance is indirectly considered good. According to Putri
(2015), large companies are more consistently on time than small companies to submit their financial reports. This is
because large companies tend to be more noticed by the public. Previous research was conducted by Niresh and Velnampy
(2014), Sanjaya and Ni Gusti (2016), and Mannan et al. (2017). Referring to the description above, the hypothesis is
stated as follows
H3: Company size affects the timeliness of financial report submissions
1.2.4 Effect of Outsider Ownership on the Timeliness of Financial Report Submissions
Mannan et al. 2017, states that external stakeholders are elements that are beyond the control of the company
(uncontrollable). Outsider ownership affects the timeliness of the submission of financial reports. Ownership from outside
parties has a great power to put pressure on the management to present information promptly. Companies with a large
proportion of public ownership tend to be on time in their financial reporting. Previous research was conducted by Niresh
and Velnampy (2014) and Sanjaya and Ni Gusti (2016)
Referring to the description above, the hypothesis is stated as follows
H4: Outsider ownership affects the timeliness of financial report submissions
1.2.5 Effect of the Reputation of a Public Accounting Firm on the Timeliness of Financial Report Submissions
A financial report or information about the company's performance must be presented accurately and reliably.
Consequently the company needs the services of a public accounting firm (PAF). PAF conducts an audit of the company's
financial statements. Companies that are audited by a reputable PAF are considered capable of providing reliable audit
results. Mannan et al. (2017) states that the use of a large accounting firm will affect the timeliness of submitting financial
reports. PAF’s will always maintain their reputation to the public. PAF’s have auditors who are reliable and trained in
carrying out audit work. PAF’s are considered to be able to do audit work efficiently and effectively. Previous research
conducted by Dogan et al. (2007) and Al-Juadi and Al-fifi (2016) show that the reputation of the PAF influences the
timeliness of submitting financial reports.
Referring to the description above, the hypothesis is stated as follows
H5: The reputation of the KAP influences the timeliness of financial report submissions
1.2.6 Effect of Financial risk on the Timeliness of Financial Report Submissions
Financial risk is associated with a situation a company experiences when having difficulty in meeting or paying off their
financial obligations. To avoid producing a report of poor quality, companies often try to fix the company's financial
statements. The process of improving financial reports requires more time thus causing a delay in the delivery of financial
reports. Companies that experience increased financial risk will request more of the auditor's attention when auditing

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financial statements. They request more time is taken to find out what happened within the company. This causes the
submission timing of the company's financial reports to be delayed. In regard to Agency theory, companies that experience
increased financial risk would encourage the management to use bonding costs which is one of the agency costs. This is
done to regain the trust of the principal party in regard to the performance of management with a guarantee that the
financial reports were audited by a public accounting firm. These costs will be even greater if there is a delay in the
completion of the audit. The high bonding cost results in an inefficient agency that brings doubt on the performance of
management and thus has an impact on the delivery of the financial reports. As revealed by Rachmawati (2008), financial
distress affects the timeliness of the publication of financial statements. Companies that experience financial difficulties
tend to be slow in submitting their financial reports.
Referring to the description above, the hypothesis is stated as follows
H6: Financial risk affects the timeliness of financial report submissions
2. Method
2.1 Population and Sample
Population used in this study was all the companies in the trade, services and investment sector listed on the Indonesia
Stock Exchange in 2014-2016. The population in this study was 78 companies. The sampling technique used was
purposive sampling. Because the research was conducted over three observation periods, the total sample size was 234
companies. Data analysis method used was logistic regression analysis because the dependent variable used dummy
variables and the independent variable were a mixture of metric and non-metric variables.
2.2 Variable Definition and Variable Measurement
The timeliness of the submission of financial reports is information that can be helpful in decision-making. Decision-
makers range from prospective investors to investors and company management themselves. There is a need to access
information at the right time to prevent losing the benefits of the information.
This variable is measured using a dummy variable with a category. For companies that had submitted their reports
promptly (submission of the financial reports was less than 120 days after the end of the year or before the 30th April)
were classed as Category 1. Companies that were not on time (submission of the financial reports were more than 120
days after the end of the year or after the 30th April) were classed as Category 0.
2.2.1 Profitability (X1)
Profitability is an indicator of a company's success (effectiveness of management) in generating profits (Brigham and
Houston, 2014). This variable is measured using the ROA (Return on Assets) ratio.
Net Profit
ROA =
Total assets
2.2.2 Leverage (X2)
Leverage is a capital structure owned by a company, where leverage is used to determine the extent to which a company
uses debt to finance it. (Brigham and Houston, 2014). This variable is measured using total debt verses total assets.
Total liabilities
DER =
Total equity
2.2.3 Company Size (X3)
The size of a company is a scale which can classify companies as large or small according to various criteria. It can be
classified from the total value of assets, total sales, market capitalization, number of workers and so on (Jogiyanto, 2013:
282). This variable is measured using the logarithm of total assets.
Company Size = Ln (Total Asset)
2.2.4 Outsider Ownership (X4)
Outsider ownership is capital owned by institutions or institutions within the company. Outsider ownership is proxied by
OWN = outside party shares divided by the total shares (Sanjaya and Ni Gusti, 2016).
Outside Party Shares
OWN =
Total Shares

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2.2.5 Public Accounting Firms Reputation (X5)

Public Accounting Firms Reputation is a public accounting firm (PAF) that is trusted by the public or by companies.
Usually, a public accounting firm has a good reputation or good name because the PAF has an affiliation with a large
public accounting firm that is universally known. These are a part of the Big Four Worldwide Accounting Firms (“Big
4”).
This variable is measured using dummy variables. Company categories that use the services of PAF affiliates with PAF
Big 4 are given a dummy value of 1 and the category of companies that use services other than PAF affiliates with PAF
Big 4 are given a dummy value of 0 (Putri, 2015).
2.2.6 Financial Risk (X6)
In this study, the study highlights financial risk in terms of the inability of assets to cover liabilities. Financial risk is
proxied by the accounting insolvency indicator, that is when the total book value of the debts exceeds the total book value
of the assets. This variable is measured by comparing long-term debt with total assets.
Long Term Debt
Accounting Insolvency =
Total Asset
3. Result
3.1 Descriptive Analysis
Descriptive statistical analysis used in this study was used to provide an overview or description of the research variables
in the form of frequency tables showing minimum values, maximum values, mean values, and standard deviations. The
results of the descriptive analysis are shown in Table 1 below:
Table 1. Descriptive statistics of Variables N = 234
Variable Minimum Maximum Mean Std. Deviation
Accuracy of Delivery Time of 0 1 0.91 0.280
Financial Reports
Profitability -0.68 0.61 0.0294 0.11507
Leverage -6.41 18.19 1.2830 2.16239
Company Size 12.72 29.75 22.9037 5.15831
Outsider Ownership 2.07 92.80 26.9973 18.21191
Paf Reputation 0 1 0.41 0.492
Financial Risk 0.00 1.56 0.1707 0.19620
The dependent variable in this study was the timeliness of financial report submissions. This variable was measured using
a dummy variable. The average of the timeliness of financial report submissions was 0.91 which was obtained from the
results of the descriptive statistics. The standard deviation value of timeliness of financial report submissions was 0.280.
The first independent variable in this study was profitability. The profitability ratio is calculated by dividing the amount
of net income by the total assets. From the results of descriptive statistics, the average profitability was 0.0294. The
highest value was equal to 0.61, and the lowest value was equal to -0.68 and the standard deviation value of profitability
was 0.11507.
The second independent variable in this study was leverage. The method of calculating leverage was by using the ratio of
debt to equity ratio (DER) which is the total debt divided by the total equity. From the results of descriptive statistics, an
average of 1.2830 was obtained. The highest value was 18.19 and the lowest value was -6.41, and the standard deviation
value is 2.16239.
The third independent variable in this study was the size of the company. The method of calculating the company size
ratio was by using the logarithm of total assets. From the results of descriptive statistics, an average of 22.9037 was
obtained. The highest value of the company size was 29.75, and the lowest value was 12.72, and the standard deviation
value was 5.15831.
The fourth independent variable in this study was outsider ownership. This variable was measured based on the number
of shares of public ownership. The results of descriptive statistics for outsider ownership showed an average value of
26.9973 with the highest value of 92.80 and the lowest value of 2.07 and the standard deviation value of 18.21191.

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The fifth independent variable in this study was the reputation of a PAF. The method of calculation was that this variable
was measured using a dummy variable. The PAF has an average value of 0.41 and a standard deviation value of 0.492.
The sixth independent variable in this study was financial risk. This variable was measured by comparing the long-term
debt with total assets. Descriptive statistical results of financial distress showed an average value of 0.1707 with the
highest value of 1.56 and the lowest value of 0.00 and the standard deviation value of 0.19620.
Results of regression coefficients are expressed in the following equation:
Ln (TL/ 1-TL) = -2,316.745 + 7.921X1 – 1.741X2 – 0.268X3 + 0.375X4+ 8.297X5 + 2.101X6 + ε
3.2 Results of Multiple Regression Analysis
The logistic regression model was used to test the hypotheses in this study and to examine the effects of profitability,
leverage, company size, outsider ownership, PAF reputation, and financial distress on the timeliness of financial report
submissions. The results of the logistic regression analysis can be seen in Table 2 as follows:
Table 2. Results of Regression Analysis
Variable Standardized Coefficient Standard Error Sig.
Profitability 7.921 3.105 0.011
Leverage -1.741 1.095 0.112
Company Size -0.268 0.154 0.082
Outsider Ownership 0.375 0.161 0.019
PAF Reputation 8.297 2.520 0.001
Financial risk 2.101 0.847 0.013
From the results of Table 2 above, profitability (ROA), outsider ownership (OWN), PAF reputation, and financial risk
affects the timeliness of the submission of financial reports; this can be seen from the significant value which is less than
0.05. Whereas leverage (DER) and company size (SIZE) do not affect the timeliness of the submission of financial
statements, this can be seen from the significant value which is a larger value of 0.05.
4. Discussion
4.1 Effects of Profitability on the Timeliness of Financial Report Submissions
Profitability affects the timeliness of the submission of financial reports because profitability shows success for the
company in generating profits. Profit is good news for companies. Thus, the company will not delay the delivery of
information containing good news. Thus, companies that can generate high profits tend to be quicker to submit their
financial reporting than companies that have small profits or suffer losses. Prompt financial reporting is also encouraged
because management will not delay in delivering information regarding the company's profit to the principal parties
because it deals with the financial compensation that will be received by the agent. It is also good news for the principal
parties so the principal parties will respond well to the management for their good performance. It is most likely the
principal parties will use the same agent again to manage the company.
This is according to research conducted by Saqer (2015), Sanjaya and Ni Gusti (2016), Mannan et al. (2017), McGee and
Yuan (2012), Owusu and Ansah (2014) which shows that profitability affects the timeliness of the submission of financial
reports. But is not in line with research conducted by Niresh and Velnampy (2014), Al-Juadi and Al-Afifi (2016), Ezat
and Elmasry (2008) and Alkhatib and Marji (2012) which stated that profitability does not affect the timeliness of financial
report submissions.
4.2 The Influence of Leverage on the Timeliness of Financial Report Submissions
Leverage does not have an effect on the timeliness of the submission of financial reports because leverage cannot be a
guide in determining the extent of mandatory financial statement disclosures. This is due to policy differences between
each company. Also, companies or agents that have cooperation with principal parties have an increasingly higher level
of leverage as a sign of the greater use of debt by agents that could endanger the company. However, looking at the current
economic conditions related to debt problems it is considered normal and is not considered a constraint in a company as
long as there is a possibility of settlement, so the principal parties ignore the information about the debt. Companies do
not consider leverage as something that will affect their public image so it can be concluded that leverage does not affect
the timeliness of financial reporting.
This is consistent with the research conducted by Niresh and Velnampy (2014), Putri (2015), Al-Juadi and Al-Afifi (2016)
who found that leverage did not affect the timeliness of the submission of financial reports. But it is not in line with the

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research conducted by Mannan et al. (2017), Sanjaya and Ni Gusti (2016), and Dogan et al. (2007) who showed different
results, namely leverage affects the timeliness of the submission of financial reports.
4.3 Effect of Company Size on the Timeliness of Financial Report Submissions
The size of the company does not affect the timeliness of the submission of financial reports because the total assets
owned by the company does not always have a significant influence. Large or small companies both want to maintain
their reputation in the general public. To maintain this reputation, they always try to publish their financial statements on
time. Companies with high total asset values do not necessarily deliver their financial statements on time, but companies
that have small total assets are also not always late in submitting their financial reports to the public. When viewed in
terms of agency theory which discusses the relationship between agents and principal parties, both large and small
companies have the same obligation to provide information about the state of the company to the public promptly. It is
important that financial reports are delivered to the public in a timely manner so the truthfulness of the financial reports
can be trusted. This is because financial reports will be used as a basis for decision making by the public.
The results of this study are in line with the research of McGee and Yuan (2012), Dogan et al. (2007) who explained in
their research that the size of the company did not affect the timeliness of the submission of financial reports. But it is not
in line with research conducted by Niresh and Velnampy (2014), Sanjaya and Ni Gusti (2016), Mannan et al. (2017), and
Al-Juadi and Al-Afifi (2016) Abdelsalam and El-Masry (2008), Ezat and Elmasry (2008) who stated that the size of the
company influences the timeliness of the submission of financial statements.
4.4 The Effect of Outsider Ownership on the Timeliness of Financial Report Submissions
Outsider ownership affects the timeliness of the submission of financial reports. The results of this study relate to the
agency theory where companies with a large proportion of outside parties (principal parties) will need information about
the financial statements submitted by the agent before the information loses its benefit to the users of that information.
The information is widely assessed by the public about the company’s performance through published financial reports.
Large outside ownership companies tend to have more supervision so that investors are assured that the company is being
monitored and also ensures the company's management does not act as they wish and are under pressure to perform well.
This is because external ownership has great power to put pressure on the management to present information promptly.
Thus, companies with a large proportion of public ownership tend to be timely in financial reporting. The concentration
of public ownership puts more pressure on the management of the companies by parties outside the company or
shareholders and are timelier in submitting the company's annual financial reports. Shareholders from outside will want
to be able to immediately find out information on developments and the condition of the company.
This is consistent with the research conducted by McGee and Yuan (2012), Niresh and Valnampy (2014) and Sanjaya and
Ni Gusti (2016) which showed that outsider ownership affects the timeliness of the submission of financial reports. But
it is not in line with the research conducted by Dogan et al. (2007) and Mannan et al. (2017) who stated that outsider
ownership does not affect the timeliness of the submission of financial reports.
4.5 The Effect of PAF Reputation’s on the Timeliness of Financial Report Submissions
A public accounting firm’s (PAF's) reputation influences the timeliness of submitting financial reports. Companies which
use PAF affiliated with the PAF “Big 4” to audit their company's financial statements, usually complete the audited
financial reports promptly. PAF’s that have a good reputation can provide accurate information and can guarantee the
credibility of financial reports. Also, people tend to be more willing to trust information based on evidence from their
work. PAF’s known to have the affiliation with PAF “Big 4” universally prevail because PAF’s who have a good reputation
have staff or agents who are professional for they obey the rules. The staff or agents tend to maintain the image of the
PAF itself so that it always keeps a good image and is always trustworthy. Companies using PAF services with a good
reputation will submit financial reports promptly. In other words, the greater the reputation of the PAF, the faster the
company will publish its financial statements to the IDX.
This is in agreement with the research results of Mannan et al. (2017), Dogan et al. (2007), Al-Juadi & Al-Afifi (2016),
Putri (2015) which showed that the reputation of PAF influences the timeliness of submitting financial statements. But it
is not in line with the research conducted by Al-Juadi and Al-Afifi (2016) and Abdelsalam and Al-Masry (2008) which
showed that the reputation of a PAF does not affect the timeliness of the submission of financial reports.
4.6 Effect of Financial Risk on the Timeliness of Financial Report Submissions
A company strives to give confidence to the principal parties for the performance carried out by the management by fixing
financial statements that contain bad news. The process of improving financial statements requires more time than usual
thus causing delays in the delivery of financial reports. Companies that experience financial distress will demand more
time from the auditors to audit financial statements by needing more time to find out what really happened in the company.
This causes the timing of the company's financial statements to be delayed. Companies with a high level of financial

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difficulty have a longer period before submitting financial reports. Companies that have a high level of leverage cannot
report their finances promptly, because the company will try to improve the level of leverage and it will be one of the
factors for why the company is late in submitting their financial reports.
The results of this study are consistent with the research conducted by Rachmawati (2008) who found that financial
distress affected the timeliness of financial report publications. But it is not in line with the research conducted by Rahmat
et al. (2009) who stated that financial distress did not affect the timeliness of financial reports submissions.
5. Conclusion
Based on the results of the research and the discussion presented above, the following conclusions can be drawn:
Profitability affects the timeliness of financial report submissions. Leverage does not have an effect on the timeliness of
financial report submissions. The size of the company does not affect the timeliness of financial report submissions.
Outsider ownership affects the timeliness of financial report submissions. The reputation of the PAF influences the
timeliness of financial report submissions. Financial risk affects the timeliness of submitting financial reports.
Suggestions
A suggestion for future research is to have a larger sample and longer research periods to obtain better results and use
analytical tools in addition to multiple linear regression.
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