Do Audit Partner Tenure and Provision of Non-Audit Services by External Auditor Reduce Audit Report Lags? : Post MFRS Implementation

Damien Lung Yau, Lee and Mohd Waliuddin, Mohd Razali and Joanne Shaza, Janang (2025) Do Audit Partner Tenure and Provision of Non-Audit Services by External Auditor Reduce Audit Report Lags? : Post MFRS Implementation. International Journal of Academic Research in Accounting, Finance and Management Sciences, 15 (3). pp. 281-296. ISSN 2225-8329

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Abstract

This paper aims to investigate the relationships between (i) non-audit services fees and audit report lag and (ii) audit partner tenure and audit report lag during post MFRS implementation. The study used 855 firm-year data that have implemented MFRS in the main market of Bursa Malaysia from 2012 to 2016 and employed multivariate regression analyses. The results revealed that there are inverse relationships between audit partner tenure and audit report lag. Longer audit partner tenure will result in greater audit efficiency. Mandatory audit partner in charge rotation could limit an audit firm in achieving optimum audit efficiency and sustainability. This study found that there is no significant association between non-audit service fees and audit report lag, which indicates there is no knowledge spillover from non audit to audit services. The Malaysian Institute of Accountants could reduce the limitations imposed on external auditors in providing non-audit services to their clients in promoting knowledge spillover to audit services.

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