The Effect of Managerial Ability on the Relationship Between the Optimistic Tone of Disclosure and the Timeliness for Issuing the Auditor's Report

Abstract

This study aimed to evaluate the impact of the CEO's administrative efficiency on the relationship between the optimistic tone of disclosure, as determined through manual content analysis, and the speed of issuing the auditor's report. This impact was measured by analyzing the time frame for submitting financial reports to the auditor. The practical aspect of the study included analyzing a sample of 100 companies in the industrial sector listed on the Iraq Stock Exchange between 2011 and 2020. The study used statistical testing of its hypotheses using the SPSS tool, version 28. The researchers reached multiple results, the most prominent of which was establishing a statistically significant relationship between the optimistic tone of disclosure and the speed of issuing the auditor's report, which was facilitated by the interactive participation of administrative efficiency. The results show that disclosing the tone of audit results will make the auditor interested in verifying the company. Companies' obligations related to publishing financial statements are required to comply with the principles of the financial accounting standards. The obligation of this report is to facilitate the collection of information by regulators and public investors so that it has an impact on the transparency of the company. Companies usually disclose only neutral news. A company with good financial position will report good news, while companies will not disclose bad news in the report. On the other hand, in order to improve the investment value of the company's stock, management can use good future news to be disclosed early while future bad news is hidden.