State-owned enterprises governance architecture redesign and audit report lags: the state-owned capital authorized operation system reform in emerging markets

Audit report lags critically affect the quality of firms’ information disclosure and the effectiveness of investors’ decision-making. Using data from state-owned listed firms in China’s A-share market, the study investigates the impact of the state-owned capital authorized operation system reform (SCAOR) on audit report lags in state-owned enterprises (SOEs). The findings indicate that the SCAOR significantly reduces audit report lags in SOEs. Furthermore, the reduction effect is achieved primarily by alleviating policy burdens and enhancing internal control quality. Additional analysis shows that the relationship between the SCAOR and audit report lags is moderated by the degree of functional transformation of state-owned capital regulatory agencies, the functional types and formation modes of state-owned capital investment and operation companies, heterogeneous shareholder governance, auditor industry expertise, industry competition and regional marketization. These findings carry significant policy implications for advancing the reform of state-owned capital and SOEs, promoting the high-quality development of capital markets.