Key audit matters, female chief financial officers, and audit report lag: evidence from Malaysia

Purpose This study aims to investigate the effect of key audit matters (KAM) and female chief financial officers (FCFOs) on audit report lag (ARL). It also sought to examine the moderating role of FCFOs in the KAM–ARL relationship. Design/methodology/approach This study used a sample of 1,059 firm-year observations for nonfinancial firms listed on Bursa Malaysia for the period 2017–2019 and used feasible generalized least squares regression to analyze the data. Findings The findings indicated that KAM significantly increased ARL, as auditors had to exert further efforts to address KAM. However, the results showed that firms employing FCFOs delivered their financial reports promptly, meaning that FCFOs weakened the positive relationship between KAM and ARL. Additional and robustness analyses provided evidence supporting the validity of the main findings. Research limitations/implications This study provides insights for regulators, policymakers, auditors and investors to evaluate the effect of KAM on ARL. It also offers insights for firms aiming to enhance diversity within their chief financial officer positions. Originality/value The study contributed to the literature by providing evidence on the impact of KAM on ARL. To the best of the authors’ knowledge, it is also the first study to examine the effect of FCFOs on audit timeliness and the moderating role of FCFOs in the KAM–ARL relationship.