The Effect of Financial Distress on Audit Delay Through Audit Complexity as an Intervening Variable with The Audit Committee as A Moderation Variable in Industrial Companies Listed on The IDX For The 2021-2025 Period

Abstract

This study aims to analyze the effect of financial distress on audit delay through audit complexity as an intervening variable, with audit committee as a moderating variable in industrial sector companies listed on the Indonesia Stock Exchange (IDX) for the period 2021–2025. This study employs a quantitative approach using secondary data from audited financial statements and annual reports. The population consists of all industrial sector companies listed on the IDX, and purposive sampling yielded 49 companies or 245 firm-year observations. Audit delay is measured as the number of days between the fiscal year-end and the date of the independent auditor's report, financial distress is measured using the modified Altman Z-Score, audit complexity is measured by the number of consolidated subsidiaries, and audit committee is measured by an audit committee effectiveness index. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0. The results show that financial distress has a significant positive effect on audit delay (β = 0.276, p < 0.001) and on audit complexity (β = 0.324, p < 0.001); audit complexity has a significant positive effect on audit delay (β = 0.298, p < 0.001) and partially mediates the effect of financial distress on audit delay (VAF = 26.0%); and audit committee significantly weakens the effect of audit complexity on audit delay (interaction β = -0.183, p < 0.01). These findings imply that audit committee effectiveness plays an important role in reducing reporting delays in companies with high audit complexity