Key audit matters and audit report lag in the Saudi governance context: Does auditor type matter?

This study examines the relationship between key audit matters (KAM) disclosures and audit report lag (ARL) in the Saudi capital market and investigates whether this relationship is moderated by auditor type. Using feasible generalized least squares (FGLS) on a panel dataset of 832 firm-year observations for firms listed on the Saudi Stock Exchange (Tadawul) over the period 2016–2021, the study finds that the number of KAM is positively associated with ARL, consistent with recent studies (Bajary et al., 2025; Cameran & Campa, 2025), suggesting that a greater number of KAM reflects increased audit complexity and audit effort, thereby requiring additional time to complete the audit. The results also show that this relationship is significantly stronger for firms audited by Big 4 auditors (Deloitte, PricewaterhouseCoopers [PwC], Ernst & Young [EY], or KPMG), and insignificant for those audited by non-Big 4 auditors. The findings remain robust across alternative model specifications and variable measurements. The study extends the audit reporting literature by demonstrating that the effect of KAM disclosures on audit report timeliness depends on auditor type. The findings also provide practical implications for regulators, investors, and auditors by highlighting that greater audit transparency through KAM may require additional reporting time and audit effort, particularly for Big 4 auditors.