What best explains reporting delays? A SME population level study of different factors



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Lukason, Oliver and Camacho Miñano, María del Mar (2021) What best explains reporting delays? A SME population level study of different factors. Sustainability, 13 (4663). pp. 1-17. ISSN 2071-1050

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Official URL: https://doi.org/10.3390/ su13094663


The objective of this paper is to find out which factors best explain why SMEs delay their annual reports (DAR). Relying on various theoretical streams, we use three types of variables to explain DAR: past DAR behaviour of managers, corporate governance characteristics and occurrence of financial distress. The study is based on the whole population data from Estonia, with a total 59,294 unique firms. Two types of DAR, i.e., short- and long-term delays, are used as dependent variables in the logistic regression analysis. The paper indicates that both types of today’s DAR are best explained by the previous DAR behaviour of managers, especially in the nearest past. Financial distress has a lower, but still acceptable explanatory power, while it remains weak for the corporate governance characteristics. Firm size and age have an impact on the results. As the paper indicates the prominence of recurrent violation behaviour in explaining DAR, the legal framework and its implementation could be adjusted to take account of this fact. The linkage of DAR and financial distress suggests the inclusion of the former into credit scoring models.

Item Type:Article
Uncontrolled Keywords:Reporting delays; Accounting regulation violation; Managerial behaviour; Corporate governance; Financial distress; SMEs
Subjects:Social sciences > Economics > Business enterprises
Social sciences > Economics > Finance
ID Code:69631
Deposited On:18 Jan 2022 11:55
Last Modified:19 Jan 2022 09:01

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