Publishing delay and the usefulness of annual reports in Libya.

Abstract

The research has three objectives. The first is to investigate the extent of publishing delay and its determinants in Libya. The second is to find out how useful the annual report is to five user groups in Libya namely the Tax Authority, Academics, Auditors, Banks and the Auditing Authority. Finally, the research also seeks to determine the impact publishing delay has on banks, Tax and Auditing Authorities. A sample of 33 companies over two year period was used to determine the extent of publishing delay and its determinants. The results indicate that the average publishing delay is 154.86 days. The results of the ordinary least square regression analysis indicate that company size, profitability, company age, number of accountants, accountant qualification, and audit opinion are significantly associated with publishing delay. However, the type of accounting system is not associated with publishing delay. The results of the usefulness of the annual report indicate that the balance sheet is regarded as the most important followed by the profit and loss account, auditors' report, management report and the funds flow statement. The results also suggest that there are significant differences in the perceived usefulness of 'on-time' and 'late' annual reports in terms of predictive value, confirmatory value and faithful representation. The results of the impact of the publishing delay on banks, Tax authority and Auditing authorities are as follows. Loans advanced by banks on the basis of 'on-time' annual reports are more likely to be repaid than those made on the basis of 'late' annual reports. The Tax Authority collect less revenue from companies whose annual reports are produced late compared to those whose annual reports are produced on time and Auditing Authority is more likely to issue a qualified audit report if the annual report is produced late compared to one produced 'on-time'. The results have important implication for the Libyan Authorities in terms of what actions they should take to reduce the publishing delay. Reduction in publishing delay is likely to increase the usefulness of the annual report and reduce the impact the delay is having on banks, Tax and Auditing Authority.