THE EFFECT OF TAX RISK ON AUDIT REPORT LAG (ARL) AND THE ROLE OF BOARD AND AUDIT COMMITTEE OVERSIGHT AS MODERATING VARIABLES

(Empirical Study of the Consumer Non-Cyclical Sector Listed on the Indonesia Stock Exchange (IDX) 2020-2024)

Abstract

This study aims to examine the effect of tax risk on Audit Report Lag
(ARL) and analyze the role of board of commissioners and audit
committee oversight as moderating variables. Audit report lag is the
time lag between the end of the financial reporting period and the
audit completion date, which is an important indicator of the quality
and timeliness of a company's financial reporting. Tax risk, as
measured by the Effective Tax Rate (ETR), is assumed to affect the
duration of the audit process due to its complexity and high potential
for tax manipulation. This study uses a quantitative approach with the
Partial Least Square - Structural Equation Modeling (PLS-SEM)
method, and the research objects are non-cyclical consumer sector
companies listed on the Indonesia Stock Exchange (IDX) during the
2020–2024 period. The results show that tax risk has a significant
effect on audit report delay. In addition, board of commissioners and
audit committee oversight is proven to weaken the positive effect of
tax risk on audit report lag, which means that effective corporate
governance can mitigate the negative impact of tax risk on reporting
timeliness. These findings provide theoretical and practical
contributions in improving audit quality and the effectiveness of public
company oversight.