THE TIMELINESS OF ANNUAL REPORTS IN BAHRAIN AND THE UNITED ARAB EMIRATES: AN EMPIRICAL COMPARATIVE STUDY

The main purpose of this study is to examine empirically the determinants of audit delay in two developing countries, the UAE and Bahrain. This study utilizes a sample of 83 firms using the accounting and market data available for 2004. The sample firms are all listed in either the UAE or Bahraini Stock Markets. Cross-sectional regression analysis is employed to test the hypotheses of the study. The results of this study show that four variables (profitability, debt ratio, sector type, and dividend payout ratio) examined in Bahrain appear to have a strong influence on the timeliness of annual reports (audit delay). However, another three variables (audit type, firm size, and price earnings ratio) are found to have a weak effect on the audit delay. In the UAE, the study concludes that two variables (debt ratio and audit type) appear to have a strong influence on audit delay, while the other variables were found not to have a significant effect on it. These results may help users of financial information to assess the impact of such variables on improving the timeliness of annual reports.