Besides, information on the financial statement of petroleum firms is always attract the interest of domestic and international investors.Typically, the auditor's conclusion of interim r
INTRODUCTION
Research rationale
As Vietnam's economy experiences rapid growth, it is essential for listed companies to attract more attention from both domestic and international investors To foster greater investor confidence, the availability of accurate accounting information is vital, highlighting the significant role of auditors An independent audit opinion assesses a company's financial statements, ensuring reliability, transparency, and integrity in financial reporting This process aids stakeholders in making informed decisions, builds trust in the financial system, and enhances the overall governance and accountability of companies.
On October 6, 2015, the Ministry of Finance issued Circular 155/2015/TT-BTC, which mandates listed companies to disclose their audited annual financial statements and semi-annual financial statements reviewed by an audit organization This regulation emphasizes the importance of transparency in the stock market, requiring audit firms to provide a final audit opinion and conclusions from interim reviews for public interest.
The petroleum industry plays a crucial role in Vietnam and globally, encompassing the extraction, production, transportation, and utilization of petroleum and natural gas resources This sector is vital for energy supply and significantly contributes to economic and social development However, in the past five years, the industry has faced substantial challenges, particularly in 2020, when the COVID-19 pandemic and prolonged low oil prices created a double crisis affecting many companies Despite these difficulties, the Ministry of Industry and Trade reported an increase in oil and gas production, with output rising from over 13 million tons in 2018 to over 14 million tons in 2022, while natural gas production grew from over 9 billion m³ in 2018.
In 2022, Vietnam's petroleum production reached 10 billion cubic meters, while the country enhanced its cooperation and investment in international oil and gas projects, including exploration efforts in Laos and Cambodia Additionally, Vietnam maintained its export of petroleum and oil products sourced from diverse gas and oil fields, with key markets including China, Japan, and South Korea.
Vietnam's top export partners are Southeast Asian countries, and the nation is actively exploring both new and existing oil and gas reserves on land and offshore This has raised concerns among investors regarding how Vietnamese petroleum companies will maintain production and business in a challenging environment Additionally, the financial statements of these firms continue to capture the attention of both domestic and international investors.
While auditors usually provide consistent conclusions in interim reviews and final audits, discrepancies have been noted in certain organizations, particularly among listed companies on the Vietnam stock market and petroleum companies This raises important questions about the reasons behind these disparities and the usefulness of interim review conclusions in shaping the final audit opinions.
The author undertook a study examining the relationship between the auditor's opinion in interim audits and year-end audits of publicly listed companies in Vietnam.
Research aim
The aim of this research is to
This study examines how the conclusions drawn from an interim audit review influence the auditor's opinion in the final audit Specifically, it focuses on measuring the effect of the interim review's conclusions on the timing of the final audit opinion, known as audit time lag Understanding this relationship is crucial for assessing the efficiency and effectiveness of the audit process.
• Figure out factors which impact the difference of auditor's conclusion of interim audit and auditor's opinion of final audit.
• Give discusses more about the relationship between the auditor’s conclusion of interim review and the auditor's opinion of final audit to help users have a more correct view of this.
Research objectives
The reseach concentrates on factors which impacts the audit time lag and the difference between auditor's conclusion of interim review and auditor's opinion of final audit.
The auditor's conclusion from the interim review significantly impacts the auditor's opinion during the final audit Specifically, the findings from the interim review can influence the timeline of the final audit process, potentially reducing the audit time lag Understanding the extent of this influence is crucial for ensuring an efficient and effective auditing process.
RQ2: What factors affect the difference between the auditor's conclusion of interim review and the auditor's opinion of final audit? What extent of its influence?
RQ3: What suggestions and recommendations are appropriate to improve the relevance of giving audit opinions on petroleum companies listed on the Vietnamese stock market?
This study examines inherited factors from prior research, analyzing data from the audited financial statements of 19 enterprises in the petroleum industry The focus is specifically on the period from 2018 to 2022.
This article highlights the critical role of audit opinions in ensuring the reliability of financial statements, emphasizing the trustworthiness of the information presented It explores the connection between auditors' conclusions from interim reviews and their final audit opinions Additionally, the article offers valuable insights and recommendations for investors to enhance their decision-making processes.
The author addresses the theoretical link between an auditor's conclusions from interim reviews and their final audit opinions, highlighting a gap in related research within Vietnam.
The research is divided into four chapters:
The first chapter offers a detailed overview of the research topic, emphasizing the importance of addressing the identified problem It also defines the specific objectives of the study, establishing a clear framework for the following chapters.
This study reviews previous research conducted in various countries, including Vietnam, and identifies the factors affecting the time lag between the auditor's opinion on the final audit and the interim review conclusions Additionally, it highlights the discrepancies found in these studies, revealing existing gaps in the literature.
Il also defines the important concepts mentioned in the research, briefs certain theoretical bases supported for the research and recommends research model and research assumptions.
The author outlines the methodology and acquisition process, detailing the measurement of variables within the research model Following this, the article discusses the design and data collection methods, along with testing and prospective approaches used to ensure a valid relationship between the variables.
- 4th Chapter: Research results and Discussion
The fourth chapter uses test of the independent, dependent and mediator variables metrics Then, pointing out the research results.
The article concludes by highlighting the limitations encountered during the research process and suggests various research methodologies It aims to provide valuable recommendations for both Vietnamese and international users, enhancing their understanding of the auditor's conclusions from interim reviews and final audit opinions, ultimately enabling them to make more informed decisions.
Scope of the research
This study examines key factors derived from prior research, analyzing data from the audited financial statements of 19 enterprises in the petroleum industry The research focuses specifically on the period from 2018 to 2022.
Contribution
The article highlights the significance of audit opinions and the reliability of financial statement information from a user's perspective It explores the connection between an auditor's conclusions during interim reviews and their final audit opinions Additionally, the article offers valuable insights and recommendations for investors to enhance their decision-making processes.
The author explores the relationship between an auditor's conclusions during interim reviews and their final audit opinions, addressing a gap in related research in Vietnam.
Research outline
The research is divided into four chapters:
The first chapter offers an in-depth introduction to the research topic, emphasizing the importance of tackling the identified problem It also delineates the specific objectives guiding the study, establishing a clear framework for the following chapters.
This study reviews previous research conducted both internationally and in Vietnam, focusing on the factors that affect the time lag between the auditor's opinion in the final audit and the conclusions drawn during interim reviews Additionally, it highlights the discrepancies identified in these studies.
Il also defines the important concepts mentioned in the research, briefs certain theoretical bases supported for the research and recommends research model and research assumptions.
The author outlines the methodology and acquisition process, detailing the approach used to measure variables within the research model This includes the design and data collection phases, as well as testing and prospective methods employed to ensure a valid relationship between the variables.
- 4th Chapter: Research results and Discussion
The fourth chapter uses test of the independent, dependent and mediator variables metrics Then, pointing out the research results.
In conclusion, the author faced several limitations during the research process, which underscores the need for further investigation To enhance understanding among both Vietnamese and international users regarding the significance of auditors' conclusions from interim reviews and final audits, it is essential to recommend effective research methodologies These recommendations aim to empower users to make more informed and accurate decisions based on audit findings.
LITERATURE REVIEW
Overall of previous researches
This research was significantly influenced by prior scientific studies, including international papers, e-books, and lectures Building on these foundational works, the authors focused on two main sections to explore innovative insights derived from a deeper understanding of the context.
Research on audit report lag reveals significant factors affecting the timing of reports A study by Nguyen Thanh Hong An and Hoang Mai Phuong (2017) analyzed 176 listed companies in Vietnam from 2013 to 2016, finding that higher inventory and accounts receivable positively influence audit report lag, while firm profitability negatively affects it Notably, companies audited by highly qualified auditors experience longer report lags, whereas those with substantial total accruals have shorter lags Wiyantoro and Usman (2018) further indicate that audit tenure negatively impacts the time between audits and reports, with audit quality and non-audit services also contributing to delays Their findings suggest that industry-specialized auditors moderate the relationship between audit tenure and report lag Additionally, Alim Al Ayub Ahmed and Shakawat Hossain (2010) highlight that company size, profitability, financial status, and auditor type significantly reduce audit report preparation time, while the type of audit report and leverage extend it Finally, research by Hsiao-Lun Lin and Ai-Ru Yen (2022) shows that interim audits can effectively shorten audit time lag.
Recent research by Hsiao-Lun Lin and Ai-Ru Yen (2017) highlights that higher agency costs related to debt and the disparities between controlling and non-controlling shareholders amplify the need for audit assurance Their findings indicate that interim financial statements are significantly impacted by these factors, necessitating a thorough audit process to ensure accuracy and reliability.
The effectiveness of corporate governance positively influences the decision to adopt audit assurance Research by Kajliter, Klassmann, and Nienhaus (2016) reveals that reviewed interim financial statements lead to greater abnormal return volatility and trading volume compared to unreviewed statements This increase in information content is largely attributed to the signaling effect of the review rather than an enhancement in earnings quality Additionally, a study by Le Thi Huong Tra and Nguyen Thi Le Thanh (2020) highlights that factors such as the type of audit firms, whether they are new or existing clients, profit levels, and current ratios significantly affect the discrepancies between interim and final audit opinions among listed cement enterprises on the Vietnamese stock exchange from 2015 to 2019.
Research gap
The author conducted a thorough review of previous studies on audit lag and the conclusions drawn by auditors during interim reviews, ultimately aiming to explore the relationship between these interim conclusions and the auditors' opinions in the final audit.
There are two mutual differences that this research developed beside inherited previous findings.
While previous studies have highlighted the effects of company size, profitability, and leverage on audit delays, the connection between mid-term review conclusions and these delays remains unexplored This investigation seeks to address this gap by analyzing how auditors' conclusions from interim reviews may influence the timing of audit completion.
There is a lack of research addressing the differences between interim review conclusions and final audit opinions, with existing studies primarily focusing on macro-level analyses across entire countries, such as the research conducted on German companies (Peter Kajtiter, Florian Klassmann, Martin Nienhaus, 2016) While some studies have examined this topic within specific sectors, like the cement industry (Le Thi Huong Tra, Nguyen Thi Le Thanh, 2020), there is a notable absence of research specifically targeting the petroleum industry.
The concepts of the research
An audit opinion is a professional judgment provided by an independent auditor regarding the fairness and reliability of a company's financial statements This opinion is included in the auditor's report and reflects the auditor's conclusions on the accuracy of the financial statements, as well as their compliance with relevant accounting standards and regulations.
The audit opinion assesses the reliability and quality of a company's financial information, providing essential insights for users like investors, lenders, and stakeholders This evaluation helps them make informed decisions based on the credibility of the financial data presented.
According to International Standards on Auditing, there are 4 different types of audit opinions, including unqualified, qualified, adverse, and disclaimer of opinion:
An unqualified opinion is issued by auditors when they conclude that a company's financial statements accurately and fairly represent its financial position and performance, in accordance with applicable accounting frameworks.
A qualified opinion is provided by auditors when they determine that the financial statements present a fair view, with the exception of a specific issue disclosed in the footnotes This qualification highlights a limitation or disagreement concerning a particular element of the financial statements.
An adverse opinion is issued by auditors when they find that financial statements are materially misstated, failing to present a true and fair view This type of opinion highlights serious discrepancies or non-compliance with accounting standards within the financial statements.
A disclaimer of opinion is issued by auditors when they face significant limitations or insufficient evidence, preventing them from expressing a definitive opinion This statement highlights the auditor's inability to gather enough appropriate evidence to support their findings.
Mistatement Qualified opinion Adverse opinion
Not enough evidences Qualified opinion Disclaimer of opinion
ISA 700 and A 700 offer essential guidance on the auditor's opinion within the audit report, outlining the auditor's responsibilities and requirements for forming an opinion on an entity's financial statements.
An interim audit is an examination of a company's financial statements and related information conducted during a specific period within the fiscal year Unlike year-end audits that assess the entire financial year, interim audits concentrate on shorter time frames, providing timely insights into financial performance.
An interim review aims to evaluate the accuracy, relevance, and compliance of financial statements with relevant accounting standards and regulations This review is essential for delivering timely insights to stakeholders, including investors, lenders, and regulatory bodies, prior to the final audit.
During an interim review, auditors carry out various procedures, including the examination of accounting records, analytical procedures, testing of internal controls, and verification of specific account balances and transactions The choice of procedures is influenced by the company's operational nature and associated risks, along with the auditor's comprehension of the internal control systems in place.
Interim audits offer significant advantages, including the early identification and correction of errors, the recognition of potential risks, and enhanced decision-making for stakeholders through access to current financial data Nonetheless, it is crucial to understand that interim audits do not deliver the same level of assurance as year-end audits due to their limited scope and timeframe.
In this study, the author intends for the interim audit to be a semi-annual review carried out by an independent auditor.
A semi-annual review, commonly known as a mid-year assessment, is a crucial process for organizations to evaluate their performance and progress at the year's midpoint Conducted around the end of June or the beginning of July, this review helps organizations assess their achievements and identify areas for improvement based on their fiscal year timeline.
The semi-annual review evaluates key aspects of the organization, focusing on financial performance, sales and marketing initiatives, operational efficiency, human resources, customer satisfaction, and other relevant areas aligned with the organization's goals.
A semi-annual review aims to assess an organization's achievements and progress towards its annual goals, highlighting areas for improvement and challenges This evaluation allows for necessary adjustments to keep the organization on track for success Additionally, it offers leaders and stakeholders a chance to reflect on past accomplishments and challenges, fostering informed decision-making for the upcoming half of the year.
ISRE 2410, titled "Review of Interim Financial Information Performed by the Independent Auditor of the Entity," offers essential guidance on the review process for interim financial information at an international level Similarly, Vietnam follows this standard with VSRE 2410, which provides comparable directives for the review of interim financial statements within the country.
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Agency theory, introduced by Michael C Jensen and William H Meckling in their 1976 paper "Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure," highlights the conflicts of interest between shareholders (owners) and managers (agents) within a company Managers may be motivated to delay or obscure financial information to manipulate performance metrics or conceal mismanagement, leading to prolonged audit delays.
Auditors serve as independent third parties to alleviate conflicts of interest and ensure shareholder confidence Their primary role involves verifying the accuracy and reliability of financial statements, which ultimately minimizes audit time lag by delivering timely and dependable information to stakeholders.
Agency theory provides a framework for examining the interplay between agency problems, managerial behavior, and audit time lag Researchers can analyze various factors influencing audit time lag, including firm size, complexity, financial performance, and management characteristics, to gain insights into the dynamics that impact audit timeliness.
Information Asymmetry Theory, introduced by Nobel laureate George Akerlof in his 1970 paper "The Market for 'Lemons’: Quality Uncertainty and the Market Mechanism," highlights the impact of asymmetric information on market dynamics This foundational concept has been further developed by economists such as Michael Spence and Joseph Stiglitz, who have expanded its implications in various economic contexts.
Information asymmetry arises when one party has access to more information than another, creating an imbalance in knowledge and increasing potential risks In auditing, this phenomenon is evident between a company's management, who possess in-depth understanding of its operations and financial status, and external users of financial statements, including shareholders and stakeholders.
During an interim review, auditors conduct limited procedures to ensure that the financial statements for the period are free from significant misstatements The auditor's conclusion at this stage relies on preliminary evidence and may not fully reflect the company's overall financial position and performance.
A final audit entails a thorough evaluation of financial statements, incorporating extensive audit procedures and evidence, along with a detailed assessment of the company's internal controls The auditor's opinion reflects a higher level of assurance, aimed at instilling confidence in external stakeholders regarding the accuracy and reliability of the financial statements.
The distinction between the auditor's conclusion from the interim review and the final audit opinion highlights the progression and enhancement of information throughout the audit process The final audit opinion seeks to mitigate information asymmetry by providing a greater level of assurance, thereby decreasing uncertainty for external stakeholders.
Max Weber, a pioneering sociologist in Institutional Theory, laid the groundwork for understanding institutions through his analysis of bureaucracy and social structures Additionally, John W Meyer and his colleagues introduced the idea of "institutional isomorphism," which describes how organizations within a particular field increasingly resemble one another over time due to external pressures.
Key scholars like Paul DiMaggio, Walter Powell, and Lynne Zucker have significantly advanced Institutional Theory by investigating processes such as conformity, mimicry, and symbolic adoption This theory analyzes how external social, economic, and regulatory institutions impact organizational behavior and decision-making In auditing, these institutional factors are crucial as they significantly influence the auditor's conclusions and opinions.
During interim reviews, auditors often face institutional pressures that prioritize quick reporting over thorough examinations External factors like reporting deadlines, market expectations, and investor demands can compel auditors to finalize interim financial statements within tight timeframes These pressures may affect the depth of audit procedures conducted and ultimately influence the auditor's conclusions during the interim review process.
During the final audit, auditors conduct a thorough examination of financial statements, delivering a higher level of assurance While institutional factors can still play a role, there is a stronger focus on implementing rigorous procedures to meet professional standards and regulatory requirements Auditors are guided by formal regulations, industry norms, and the expectations of stakeholders such as shareholders, regulators, and financial markets.
Institutional Theory provides insights into the differing approaches auditors take during interim reviews versus final audits, highlighting the influence of external institutions and their expectations on auditing practices This theory emphasizes that auditors function within a social and regulatory framework that establishes standards and expectations for audit conduct and reporting, affecting the timing and scope of audit procedures.
Signaling Theory in economics and finance was originally developed by Michael Spence in his influential 1973 paper "Job Market Signaling".
During the interim review, auditors provide preliminary findings and progress signals to stakeholders, including management, regulators, and investors These insights help manage expectations and instill confidence in the financial statements while recognizing that the assessment is ongoing The auditor's conclusions may also identify significant issues or limitations, indicating areas that need further analysis or attention.
In the final audit, auditors focus on delivering higher assurance and reliability by conducting more comprehensive procedures and gathering additional evidence They apply rigorous scrutiny to the financial statements, ensuring that they accurately reflect the company's financial position The auditor's opinion in the final audit report signals to shareholders, lenders, and other stakeholders that the financial statements are presented fairly and in compliance with relevant accounting standards.
RESEARCH METHODS
Research design
The research approach used in this study is quantitative Quantitative research methodologies include gathering and processing secondary data from financial statements.
Sampling by whole method, Research unit is all enterprises have registered to do petroleum business listed on the stock market of Vietnamfor a period of 5 years (2018 2022).
Data is filtered and cleaned using Excel, followed by analysis through regression techniques applied to panel data with STATA 17, utilizing the Random Effects Model (REM).
3.1.2 Research process and data analysis process
Explain the results and write a complete research paper
Step 1: Import the data table into the STATA software.
Step 2: Descriptive statistics are performed on the data to determine the characteristics of variables, such as minimum and maximum values, standard deviation, and mean This provides an overall overview of the research data for the reader.
Step 3: Analyze the correlation between variables to detect multicollinearity in the model.
Step 4: Perform the Pooled Ordinary Least Squares (OLS) regression model.
Step 5: Perform validation of the model's defects If it have no defects, go to step 9 If it have defects, go to step 6.
Step 6: Perform the Fixed Effects Model (FEM) regression model.
Step 7: Perform the Random Effects Model (REM) regression model.
Step 8: Choose between the FEM and REM models using the hypothesis:
HO: REM model is appropriate.
Hl: FEM model is appropriate.
When the p-value exceeds the significance level of 0.05, the null hypothesis (HO) is accepted, indicating that the Random Effects Model (REM) is the more suitable choice In contrast, if the null hypothesis is rejected, the Fixed Effects Model (FEM) should be selected as the preferred model.
Step 9: Check for any remaining flaws in the chosen model If there are still flaws, perform generalized least squares (GLS) to address them Then, present the results of the research in Chapter 3, based on these steps.
Because DIF is binary scales so the author use logistic regression.
Collection, analysis and processing tools
The author employs Excel to gather and prepare data for analysis Subsequently, STATA is utilized to conduct descriptive statistical analysis and test the regression model, yielding significant results Finally, the findings of the study are summarized using Word.
Variable Measurement
In this study, there are two main models, so there will be two dependent variables and independent variables as follows:
In this research, the author selected records based on a specific measurement method, previously utilized by K Hung Chan, Vivian Wei Luo, and Phyllis L.L Mo (2015), as well as Amos O Arowoshegbe, Emmanuel Uniamikogbo, and Amos S Adeusi (2017), and Nguyen Thanh Hong An and Hoang Mai Phuong (2017) A key aspect of this method is the distinction between the accounting year-end and the financial reporting date (published date).
LAG= Ln(Published date- accounting year end)
3.3.1.2 Difference of audit opinions between interim and final audit reports
Building on prior research by Hsiang-Tsai Chiang and Shu-Lin Lin (2012) and Le Thi Huong Tra and Nguyen Thi Le Thanh (2020), the author applied a specific calculation method for the dependent variable A value of 1 is assigned when there is a discrepancy between the auditor's conclusion during the interim review and the final audit opinion, while a value of 0 is assigned when no difference is observed.
1: If auditor’s conclusion of interim review is different from auditor's opinion of final audit.
DIF: Difference of auditor’s conclusion of interim review and auditor's opinion of final audit.
The type of audit firm significantly impacts the auditing process, particularly regarding the time taken to publish reports Reputable independent audit firms, known for their scale and expertise, typically have skilled professionals and streamlined processes that minimize delays in report release This efficiency often leads to greater consistency between interim reviews and final audit opinions Consequently, it raises the question of whether a correlation exists between the type of audit firm and the time lag in audits, as well as the differences in auditor conclusions between interim reviews and final opinions, and how these factors influence one another.
Research indicates that the type of independent audit firm significantly affects audit reporting lag Dr N.O Dibia and J.C Onwuchekwa (2013) found a positive correlation, a finding supported by Ilaboya O.J and Lyafekhe Christian (2014) In Vietnam, Nguyen Thanh Hong An and Hoang Mai Phuong (2017) echoed these results, differentiating between audits conducted by Big 4 firms and non-Big 4 firms to align with the local context However, variations exist in the degree of impact across these studies, as noted by Stergios Leventis, Pauline Weetman, and Constantinos Caramanis.
Research from 2005 indicates that the type of audit firm can have a negative impact on outcomes Consequently, the author anticipates that the effects will align with the findings of Stergios Leventis, Pauline Weetman, and Constantinos Caramanis Based on this premise, the author formulates the following hypothesis.
Hl: The larger the reputation and scale of the auditing firm, the shorter the audit reporting lag.
The author aligns with the findings of Le Thi Huong Tra and Nguyen Thi Le Thanh (2020), which suggest that the type of audit firm significantly impacts both interim and final audit opinions This leads to the proposal of the following hypothesis.
H7: The larger the reputation and scale of the auditing firm, the less difference of auditor's conclusion of interim review and auditor's opinion of final audit.
This factor is measured as follows:
0 - Not audited by the Big 4
Numerous studies indicate that a company's size positively affects the time required to publish reports, as larger firms necessitate greater information disclosure Agency theory suggests that the separation of ownership and management creates agency costs, which tend to be higher in larger companies To mitigate these costs, business owners often seek increased transparency from management, leading auditors to require more time to conduct thorough audit procedures and gather sufficient evidence Research by Arifuddin, Kartini Hanafi, and Asri Usman (2017) and Reni Yendrawati and Varaby Wahyu Mahendra (2018) supports the notion that company size influences audit delays Conversely, a study by Christy Ulina Ginting and Widi Hidayat (2019) found a negative relationship between firm size and audit time lag Therefore, the author proposes the following hypothesis:
H2: The larger the firm size, the longer the audit reporting lag.
Large businesses face numerous tasks and procedures that require attention The assurance level varies between audit periods; for instance, interim reviews require limited assurance, whereas final audits demand a higher level of assurance This discrepancy means that certain aspects of the audit may remain unaddressed until the end of the period, leading to a gap between the conclusions drawn during the interim review and the final audit opinion.
Studies by DeFond, M.L., Francis, J.R and Wong, T.J (2000), K Keasey,R Watson
Wynarczyk (2012) and Le Thi Huong Tra & Nguyen Thi Le Thanh (2020) have demonstrated that a company's size influences the disparity between the conclusions drawn by auditors during interim reviews and their opinions in final audits Consequently, the author proposes the following hypothesis.
H8: The larger the firm size, the less consistent of auditor's conclusion of interim review and auditor’s opinion of final audit.
The size of a company is evaluated using the logarithm of the total assets of the company.
When a new audit firm takes over, they require time to transition and familiarize themselves with the company's operations, systems, processes, and financial data, including understanding the industry, assessing internal controls, and reviewing previous audit work This initial transition period can extend the overall audit process However, the author anticipates that changing audit firms will positively affect the audit reporting lag, a finding supported by research from Mai Dao, Trung Pham (2014), Ahsan Habib, Md Borhan Uddin Bhuiyan, Hedy Jiaying Huang, Muhammad Shahin Miah (2018), and Vicky Anggel Putra, Romanus Wilopo (2018) Consequently, the author proposes the following hypothesis.
H3: The more frequently the organization switches audit firms, the longer audit delay
According to Hsiang-Tsai Chiang, Shu-Lin Lin, Hsiuping (2012), Rahmat Akbar Simamora, Hendarjatno Hendarjatno (2019), Le Thi Huong Tra, Nguyen Thi Le Thanh
In 2020, switching independent audit firms positively influenced the discrepancy between interim review conclusions and final audit opinions While shorter audit engagements may compromise auditor competence due to a lack of familiarity with the company, longer engagements can diminish independence by fostering closer ties between management and auditors To enhance the accuracy of financial assessments, it is recommended that audit contracts be of sufficient length, allowing auditors to gain a comprehensive understanding of the company's environment and financial status.
H9: The more frequently the organization switches audit firms, rhe greater the difference of auditor’s conclusion of interim review and auditor’s opinion of final audit.
This factor is measured as follows:
Leverage, defined as a company's use of debt for financing, significantly affects audit lag Companies with higher leverage often present complex financial statements that necessitate additional time and effort from both management and auditors to ensure compliance with accounting standards This complexity stems from the need to evaluate and disclose debt covenants, interest expenses, and related financial disclosures, ultimately leading to a prolonged audit process Auditors must thoroughly analyze financial risks such as default risk, liquidity risk, and covenant compliance, requiring an in-depth understanding of the company's debt structure and obligations While Refi Firmansyah and Lailatul Amanah (2019) found that leverage impacts audit lag, contrasting research by Friska Firnanti and Arwina Karmudiandri (2020) indicated no influence of leverage on audit report lag This discrepancy prompts further investigation into the relationship between leverage and audit lag.
H4: The higher leverage the company has, the longer the audit lag
The relationship between leverage and the difference in audit opinions between interim and final audits is complex and not straightforward Companies with higher leverage often face increased financial risks, prompting auditors to evaluate these risks during the audit process If auditors discover significant concerns regarding a company's capacity to fulfill its debt obligations, this may lead to differing conclusions between the interim review and the final audit opinion As more information is revealed during the final audit, auditors might identify additional risks or issues that were not evident during the interim audit, potentially resulting in a change of opinion While previous studies by Hsiang-Tsai Chiang et al (2012) and Le Thi Huong Tra and Nguyen Thi Le Thanh (2020) suggest that leverage has a negative effect or no effect on the differences in auditors' opinions, this author aims to further investigate this relationship and propose new hypotheses.
HI0: The higher leverage the company has, the less consistent of auditor's conclusion of interim review and auditor's opinion of final audit.
This factor is measured as follows:
LEV= Total Debt/ Total assets
Higher profitability typically leads to enhanced financial reporting resources and improved accuracy and compliance, which can streamline the audit process and reduce audit lag Profitable companies often implement more comprehensive systems, facilitating audits; however, factors like operational complexity, industry regulations, auditor resources, and management cooperation also play significant roles in determining audit duration Research by Akingunola et al (2018) indicates a positive correlation between profitability and audit time lag, while studies by Hapsari et al (2016) and Mazkiyani et al (2017) suggest a negative effect on audit delay Therefore, the author proposes the following hypothesis.
H5: The higher profitability the company has, the longer the audit lag
Profitability is a crucial indicator of a company's financial health, and during the interim review, auditors evaluate financial performance based on limited information, leading to a preliminary conclusion In contrast, the final audit provides auditors with comprehensive and updated financial data, including the company's full operational results for the reporting period Significant changes in profitability identified during the final audit can alter the auditors' evaluation and create discrepancies between the interim review conclusion and the final audit opinion Additionally, profitability plays a vital role in assessing a company's ability to continue as a going concern While interim audits may lack essential information for evaluating long-term profitability and financial viability, final audits offer a clearer picture of the company's profitability and cash flow If auditors express concerns about the company's long-term sustainability and ability to meet financial obligations, this may further differentiate the conclusions drawn in the interim review from those in the final audit.
Research hypotheses
After completing the measurements, to facilitate research purposes, the author would like to summarize the research hypotheses that need to be tested:
Hl: The larger the reputation and scale of the auditing firm, the shorter the audit reporting lag.
H2: The larger the firm size, the longer the audit reporting lag.
H3: The more frequently the organization switches audit firms, the longer audit delay H4: The higher leverage the company has, the longer the audit lag
H5: The higher profitability the company has, the longer the audit lag
H6: If the auditor's conclusion of the interim review is unqualified conclusion, the audit delay is reduced
H7: The larger the reputation and scale of the auditing firm, the less difference of auditor's conclusion of interim review and auditor's opinion of final audit.
H8: The larger the firm size, the less consistent of auditor's conclusion of interim review and auditor's opinion of final audit.
H9: The more frequently the organization switches audit firms, the greater the difference of auditor's conclusion of interim review and auditor's opinion of final audit.
H10: The higher leverage the company has, the less consistent of auditor’s conclusion of interim review and auditor's opinion of final audit.
Hll: The higher profitability the company has, the less consistent of auditor's conclusion of interim review and auditor's opinion of final audit.
HI2: The higher current ratio the company has, the more consistent of auditor's conclusion of interim review and auditor's opinion of final audit.
LAG = aQ+ aỵ TYPE 4- a2SIZE 4- a3SWITCH 4- a^LEV 4- asROA 4- a6INOP
INOP: Audit conclusion in semi-annual review
Type Measure Expected impact Reference source Audit time lag
Dependent the difference between the accounting year end and the financial reporting date (published date)
K Hung Chan, Vivian Wei Luo & Phyllis L.L Mo
(2017), Nguyen Thanh Hong An, Hoang Mai Phuong (2017)
Independent 1: If a firm is audited by Big 4 audit firm 0: Otherwise
Dr N.o Dibia, J.c Onwuchekwa (2013) , Ilaboya, o J., lyafekhe Christian
(2014), Nguyen Thanh Hong An, Hoang Mai Phuong
(2017), Stergios Leventis, Pauline Weetman and Constantinos Caramanis (2005) Firm Size Independent LN(total asset) + Arifuddin, Kartini
Hanafi and Asri Usman (2017), Reni Yendrawati, Varaby Wahyu Mahendra
Independent 1: Audit firm change 0: Otherwise
Pham (2014), Ahsan Habib, Md Borhan Uddin Bhuiyan, Hedy Jiaying Huang, Muhammad Shahin Miah (2018), Vicky Anggel Putra,
Leverage Independent Debt/Total asset + Refi Firmansyah,
(2019), Friska Firnanti, Arwina Karmudiandri (2020) Profitability Independent profit after tax/ total asset
Akingunola, Kenny Adedapo Soyemi, Rasaq Okunuga
(2018), Adlina Nindra Hapsari, Negina Kencono Putri, Triani Arofah
(2016) and Nur Mazkiyani, Sigit Handoyo (2017) Auditor's conclusion of interim review independent 1 - Unqualified conclusion
DIF = po + P^YPE + p2SIZE + p3SWITCH + P^LEV + PsROA + p6CR
Type Measure Expected impact Reference source
Difference of of auditor's conclusion of interim review and auditor's
Dependent 1: If auditor's conclusion of interim review is different from auditor's opinion of
Hsiang-Tsai Chiang, Shu-Lin Lin (2012), Le Thi Huong Tra, Nguyen Thi Le Thanh (2020) opinion of final audit. final audit.
Independent 1: If a firm is audited by Big 4 audit firm
Le Thi Huong Tra, Nguyen Thi Le Thanh (2020)
Firm Size Independent LN(total asset)
(2012), Le Thi Huong Tra, Nguyen Thi Le Thanh(2020)
Independent 1: Audit firm change 0: Otherwise
(2012), Rahmat Akbar Simamora, Hendarjalno Hendarjatno (2019), Le Thi Huong Tra, Nguyen Thi Le Thanh (2020)
Leverage Independent Debt/Total asset
(2012), Le Thi Huong Tra, Nguyen Thi Le Thanh(2020)
Profitability Independent Profit after lax/ total asset
(2012), Le Thi Huong Tra, Nguyen Thi Le Thanh(2020)
Current ratio Independent Current asset/ current liability
Hsiang-Tsai Chiang, Shu-Lin Lin (2012), Le Thi Huong Tra, Nguyen Thi Le Thanh (2020)
Audit conclusion in semi-anual review
Audit Firm Audit time lap
RESEARCH RESULTS AND DISCUSSION
Descriptive statistics
Variable Obs Mean Std dev Min Max
The data in the table shows an overview of the descriptive statistics of the independent and dependent variables.
A total of 95 observations were examined.
Average audit lag time is 4.225039 The minimum is 2.772589, while the highest is 5.036953 This demonstrates that the audit time lag is not too big.
The average variance in audit opinions between mid-term and final audits in the petroleum industry is 0.136842, with a standard deviation of 0.345503 This indicates a relatively consistent audit opinion across companies within the sector.
The average for independent audit firms of this type is 0.2947368, indicating that most businesses are audited by firms other than the Big Four auditing firms.
The average firm size (SIZE) is 14.05, with a relative standard deviation of 2.14, indicating a moderate variation in enterprise sizes The largest firm measures 18.18, while the smallest is 11.15, highlighting a noticeable yet manageable gap in size among these enterprises.
The average number of changing audit firms (SWITCH) is 0.1473684 The relative standard deviation is 0.3563533 It shows that petroleum companies do not change audit firms much.
Financial leverage (LEV) in petroleum businesses has an average value of 0.4945, with a maximum of 0.8803 and a minimum of 0.0328, indicating a general lack of focus on financial leverage among these companies The impact of financial leverage on audit lag and the variance between mid-term and final audit opinions will be investigated by the author in upcoming research.
The profitability ratios for the petroleum industry reveal a significant disparity, with the highest at 20.27 and the lowest at -7.34 in terms of Return on Assets (ROA) The negative profitability can be largely attributed to the adverse effects of the Covid pandemic on business operations Additionally, with an average ROA of 2.63, it is evident that a majority of petroleum companies are struggling, leading to overall low profitability in the sector.
The average value of the auditor's conclusion in of interim review is 0.6421053 This shows that the majority of the audit opinion is unqualified conclusion.
Analyzing the correlation matrix between study variables in the model
Table 4.2: Correlation matrix of model 1
The correlation analysis results indicate a clear relationship between independent and dependent variables, as well as among independent variables The comparison of correlation coefficients reveals significant insights into these relationships.
LAG TYPE SIZE SWITCH LEV ROA INOP
In the regression analysis, all independent variables in the model, except for SIZE and TYPE, exhibit a coefficient of 0.7726, indicating strong consistency To enhance the credibility of the analytical results, it is advisable to retain SIZE and TYPE in the model during the regression process Should these variables prove to be unsuitable, they can be removed in subsequent analyses.
Table 4.3: Correlation matrix of model 2
DIF TYPE SIZE SWITCH LEV ROA CR
The correlation analysis reveals that the correlation coefficients among independent variables are generally below 0.5, indicating a lack of similarity, with the exception of SIZE and TYPE, which have a coefficient of 0.7726, and CR and ROA, which have a coefficient of 0.5377 Consequently, removing SIZE, TYPE, CR, and ROA would result in a model with entirely consistent variables However, to enhance the credibility of the analysis, it is advisable to retain these four variables during regression If they prove to be unsuitable for the model, they will be eliminated.
Result of the Pooled Ordinary Least Squares (OLS) regression analysis
LAG Coefficient Std err t p>ltl [95% conf, interval]
Table 4.4: Pooled OLS regression of model 1
The VIF test results indicate a mean VIF coefficient of 1.74, demonstrating that all coefficients are below the threshold of 10 This suggests that the model is free from multicollinearity issues, ensuring that it will not produce erroneous signs.
HO: The Pooled OLS model does not have Heteroskedasticily
Hl: The Pooled OLS model has Heteroskedasticity
From the table of results of autocorrelation test for the Pooled OLS model
-> Pooled OLS model has no Heteroskedasticity phenomenon
Hl: The Pooled OLS model has autocorrelation
From the results of the autocorrelation test for the REM model
^ REM model does not have autocorrelation phenomenon
After thorough testing, the Pooled OSL model showed no defects, leading the author to accept its results Consequently, there is no necessity to conduct REM or FEM modeling.
Table 4.6: Logistic regression of model 2
DIF Coefficient Std err t p>ltl [95% conf, interval]
Test the research hypotheses
We can see the impacts of the independent variables are described as follows from the results shown in the regression table using the Pooled OLS model:
The study reveals a positive correlation between the reputation and size of the auditing firm and audit time lag, with a coefficient of 0.272786 and a p-value of 0.023, indicating statistical significance at the 0.05 level This finding aligns with the research models of Dibia et al (2013), Ilaboya et al (2014), and Nguyen et al (2017) However, it contradicts the conclusions of Leventis et al (2005), leading the author to reject the hypothesis that larger auditing firms result in shorter audit reporting lags.
The size of a firm (SIZE) shows a positive correlation with audit lag, indicated by a coefficient of 0.0050182, although this result is not statistically significant at the 5% level This suggests that larger enterprises tend to experience increased audit latency, aligning with findings from previous studies by Arifuddin, Kartini Hanafi, Asri Usman (2017), and Reni Yendrawati, Varaby Wahyu Mahendra.
In the study conducted by Christy Ulina Ginting and Widi Hidayat, the hypothesis suggesting that larger firm size leads to longer audit reporting lag was rejected, as indicated by a p-value of 0.849, which exceeds the significance level of 0.05.
The study indicates that changing audit firms (SWITCH) has a positive effect on audit lag, with a coefficient of 0.0826189, although this result is not statistically significant at the 5% level This suggests that frequent changes in audit firms may lead to longer audit delays Supporting findings from researchers such as Mai Dao, Trung Pham (2014), Ahsan Habib, Md Borhan Uddin Bhuiyan, Hedy Jiaying Huang, Muhammad Shahin Miah (2018), and Vicky Anggel Putra, Romanus Wilopo (2018) align with this observation However, the p-value of 0.39 exceeds the significance threshold of 0.05, leading to the rejection of the hypothesis that more frequent switches in audit firms result in longer audit delays.
Financial leverage (LEV) has a negative relationship with audit reporting lag, indicated by a coefficient of -0.1243 823, although it is not statistically significant at the 5% level This finding contradicts the research conducted by Refi Firmansyah and Lailatul Amanah (2019), which suggests that companies with lower debt experience longer audit time lags The p-value of 0.57, which exceeds the alpha level of 0.05, leads the author to reject the hypothesis that higher leverage results in longer audit lags.
It is the same with Friska Firnanli, Arwina Karmudiandri (2020).
The study reveals that profitability, measured by Return on Assets (ROA), exhibits a negative correlation with audit lag, which is not statistically significant at the 5% level This finding contrasts with the research conducted by Akingunola et al (2018) but aligns with the studies by Hapsari et al (2016) and Mazkiyani et al (2017) Specifically, it indicates that as a company's profitability increases, the duration of the audit lag decreases The P-value of 0.105 exceeds the significance level of 0.05, leading to the rejection of the hypothesis that higher profitability results in longer audit lag.
The auditor's conclusion of an interim review (INOP) shows a positive relationship (coef= 0.0799453) but lacks statistical significance at the 5% level, contradicting the findings of Hsiao-Lun Lin and Ai-Ru Yen (2022) The p-value of 0.302 indicates that the results are not meaningful, leading the author to reject hypothesis H6, which posited that a limited assurance conclusion in the semi-annual review would reduce audit delays.
Table 4.7: Result after analysis of model 1
Variables name Variables Type Expected impact
Audit time lag LAG Dependent
Audit Firm Type TYPE Independent — +
Firm Size SIZE Independent + No impact
Audit Firm Switch SWITCH Independent + No impact
Leverage LEV Independent + No impact
Profitability ROA Independent + No impact
Auditor’s conclusion of interim review
The Pseudo R2 value of 0.2561 indicates that the independent variable accounts for 25.61% of the variation in the log, highlighting the distinction between the auditor's conclusions from the interim review and the final audit opinion regarding the dependent variable's non-difference.
• Value Prob>chi2 = 0.0035 < 0.05 concludes that the current Logit model is correct
We can see the impacts of the independent variables are described as follows from the results shown in the regression table using the logit model:
The study reveals a positive correlation between the reputation and size of the auditing firm and the disparity between the auditor's conclusion of the interim review and the final audit opinion, with a coefficient of 5.05607 and a p-value of 0.01, indicating statistical significance This finding contradicts the research conducted by Le Thi Huong Tra and Nguyen Thi Le Thanh (2020) and the initial hypothesis Consequently, the author rejects hypothesis H7, which posits that a larger reputation and scale of the auditing firm would result in a smaller difference between the interim review and final audit conclusions.
The analysis reveals a negative correlation of -0.5732813 between firm size (SIZE) and the difference between the auditor's conclusion of the interim review and the auditor's opinion of the final audit, although this finding is not statistically significant at the 5% level This suggests that larger enterprises tend to exhibit a smaller difference in auditor conclusions, aligning with the findings of DeFond's studies.
M.L., Francis, J.R and Wong, T.J (2000), K Keasey.R Watson &p Wynarczyk
In their 2020 study, Le Thi Huong Tra and Nguyen Thi Le Thanh found that while the results aligned with the initial hypothesis, the p-value of 0.086 exceeded the significance level of 0.05 Consequently, the hypothesis (H8) suggesting that larger firm sizes lead to less consistency between the auditor's conclusions from interim reviews and the final audit opinions was rejected.
The frequent change of audit firms, referred to as SWITCH, significantly influences the disparity between the auditor's conclusion of interim reviews and the final audit opinion, with a positive coefficient of 2.802003 This relationship is statistically significant at the 5% level, as evidenced by a p-value of 0.008, which is less than the threshold of 0.05 Research by Hsiang-Tsai Chiang et al (2012), Rahmat Akbar Simamora et al (2019), and Le Thi Huong Tra et al (2020) supports the finding that organizations that frequently switch audit firms tend to exhibit greater differences in auditor assessments.
Financial leverage (LEV) is found to have a negative relationship (coef= -6.422515) with the auditor's conclusion of interim reviews and the auditor's opinion of final audits, although this relationship is not statistically significant at the 5% level (p-value=0.113 > α=0.05) This aligns with the findings of Hsiang-Tsai Chiang, Shu-Lin Lin, and Hsiuping (2012), indicating that companies with lower debt levels tend to exhibit greater discrepancies between interim review conclusions and final audit opinions Consequently, the author rejects the hypothesis that higher leverage results in less consistency between these two auditor assessments, which is also supported by the research of Le Thi Huong Tra and Nguyen Thi.
The study reveals a statistically significant positive correlation between profitability (ROA) and the variance between auditors' conclusions from interim reviews and final audit opinions, with a p-value of 0.023, which is below the 0.05 threshold This finding aligns with the research conducted by Hsiang-Tsai Chiang, Shu-Lin Lin, and Hsiuping (2012) Consequently, the hypothesis (H1) stating that higher profitability leads to less consistency between auditors' interim review conclusions and final audit opinions is accepted.
The current ratio (CR) exhibits a negative relationship (coef= -1.035801) with the discrepancy between the auditor's conclusion of the interim review and the auditor's opinion of the final audit, although this relationship is not statistically significant at the 5% level This finding aligns with previous studies by Hsiang-Tsai Chiang and Shu-Lin Lin (2012), as well as Le Thi Huong Tra and Nguyen Thi Le Thanh (2020) It indicates that companies with a lower current ratio tend to show greater discrepancies between the interim and final audit opinions Consequently, with a p-value of 0.050, the author rejects the hypothesis that a higher current ratio leads to greater consistency between the auditor's interim review conclusion and the final audit opinion.
Table 4.8: Result after analysis of model 2
Variables name Variables Type Expected impact
Difference of audit opinions between interim and final audit reports
Audit Firm Type TYPE Independent — +
Firm Size SIZE Independent + No impact
Audit Firm Switch SWITCH Independent + +
Leverage LEV Independent + No impact
Current ratio CR Independent — No impact
Conclusion
This study provides a comprehensive overview of both domestic and international research regarding the relationship between interim and final audit opinions It examines the theories applied in this context and highlights the research methods utilized, revealing significant findings while addressing encountered obstacles Notably, the research investigates whether interim audit opinions assist in forming final audit opinions and explores the differences between these two assessments The analysis is based on mid-term and final financial statements spanning five years, from 2018 to 2022.
The article presents two research models focused on audit opinions and their implications Model 1 examines how midterm audit opinions affect audit latency, incorporating factors like audit firm type, firm size, audit firm switches, leverage, and profitability In contrast, Model 2 analyzes the differences between midterm and final audit opinions, considering similar influencing factors, including audit firm type, firm size, audit firm switches, leverage, profitability, and the current ratio.
The analysis indicates that mid-term audit opinions do not significantly influence audit delays or contribute meaningfully to final audit opinions Additionally, the type of audit firm positively impacts audit time lag; firms with higher reputation and credibility tend to experience greater audit latency This is because reputable auditing firms prioritize maintaining their image by conducting thorough procedures, which necessitates additional time to ensure the highest level of assurance in their opinions.
The findings indicate that the reputation and credibility of an audit firm significantly impact the differences between mid-term and final audit opinions Larger audit firms, equipped with more resources for thorough examination of audit evidence, are likely to uncover additional insights during the final audit This newly obtained evidence can lead to a deeper understanding of financial transactions and may influence the auditor's assessment, resulting in differing opinions from those expressed in the interim audit.
The study indicates a positive correlation between switching audit firms and profitability, particularly regarding variations in audit opinions during mid-term and final audits This finding supports the author's hypothesis and aligns with previous research, leading to a comprehensive justification presented in earlier sections of the article.
The study indicates that mid-term audit opinions have limited value in determining final audit outcomes, as various factors contribute to discrepancies between interim and final audit opinions This insight is crucial for auditors and stakeholders who rely on financial statements, enabling them to better comprehend the financial situation and make informed decisions.
Contributions
This research paper aims to address the limited interest and attention given to the relationship between interim audit opinions and year-end audits in Vietnam By exploring this unique aspect, the study will contribute valuable theoretical insights for future research, particularly within the Vietnamese context.
This study aims to assist users of financial statements, particularly investors and creditors in the petroleum sector, by enhancing their understanding of audit reports and financial statements By providing clearer insights, it enables users in Vietnam and globally to make more informed decisions.
Research findings indicate that understanding key factors influencing auditors can enhance their overall perspective, leading to more accurate audit procedures This improvement not only reduces the duration of the audit process but also ensures a more consistent audit opinion during both mid-term and final evaluations.
Limitations
During the research implementation, the author encountered several limitations that remain unresolved, stemming from both objective and subjective factors Two key limitations were identified.
The Vietnamese stock exchange has a limited number of companies in the petroleum industry, resulting in a constrained dataset for research purposes.
The research focuses solely on external factors affecting the oil and gas industry, neglecting crucial internal elements such as internal control mechanisms, the role of the audit committee, and the effectiveness of information systems.
Recommendations
The author emphasizes the need for future research to encompass a broader range of data and consider various factors influencing audit reporting lag and differences between interim and final audits, such as industry characteristics and internal controls It is crucial to avoid sampling both subsidiary and parent companies simultaneously to prevent data duplication, while ensuring a diverse sample that includes large enterprises as well as small and medium-sized enterprises Additionally, expanding the research model to incorporate multiple frameworks will facilitate comprehensive comparisons and conclusions, allowing for insights from both national and international perspectives, particularly within Southeast Asia and broader Asian contexts.
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Appendix 01: List of 19 petroleum enterprises listed on the Vietnam stock market
ABS BinhThuan Agriculture Services JSC
APP Additives And Petroleum Products Joint Stock Company
BSR Binh Son Refining and Petrochemical Company Limited
PCT Vietnam Gas and Chemicals Transportation Corporation
PEG Petec Trading and Investment Corporation
PIT Petrolimex International Trading Joint Stock Company
PLC Petrolimex Petrochemical Corporation - JSC
PLX Viet Nam National Petroleum Group
POV Vung Ang Petroleum Joint Stock Company
PPY Phu Yen Petrovietnam Oil JSC
PSC Petrolimex Saigon Transportation and Service JSC
PSH Nam Song Hau Trading Investing Petroleum Joint Stock Company PTV Petroleum Trading Joint Stock Company
PVD PetroVietnam Drilling & Well Services Corporation
PVO PV Oil LUBE JOINT STOCK COMPANY
TDG TDG Global Investment Joint Stock Company
VXT Transport Warehousing and Trade Service JSC
Variable Obs Mean std dev Min Max
Appendix 03: Results of the correlation coefficient matrix between pairs of variables
pwcorr LAG TYPE SIZE SWITCH LEV ROA INOP
LAG TYPE SIZE SWITCH LEV ROA INOP
pwcorr DIF TYPE SIZE SWITCH LEV ROA CR
DIF TYPE SIZE SWITCH LEV ROA CR
Appendix 04: Pooled OLS model regression results
reg LAG TYPE SIZE SWITCH LEV ROA INOP
Prob > F R-squared Adj R-squared Root MSE
[95% conf, interval] LAG Coefficient std err t p>|t|
TYPE 272786 1178228 2.32 0.023 0386379 5069341 SIZE 0050182 0263596 0.19 0.849 -.0473659 0574023 SWITCH 0826189 0955403 0.86 0.390 -.1072473 2724851 LEV -.1243823 2182331 -0.57 0.570 -.5580746 3093101 ROA -.0146429 0089316 -1.64 0.105 -.0323927 0031068 INOP 0799453 0769468 1.04 0.302 -.0729704 232861 cons 4.11069 3293795 12.48 0.000 3.456117 4.765262
SIZE TYPE LEV INOP ROA SWITCH
Cameron & Trivedi's decomposition of IM-test
Wooldridge test for autocorrelation in panel data H0: no first-order autocorrelation