How does human resource investment in internal control affect audit reporting lag?*

Il Hang Shin, Ho Young Lee, Hyun Ah Lee, Myungsoo Son

Research output: Contribution to journalArticlepeer-review

18 Citations (Scopus)


The Korean government requires listed firms to disclose the total number of employees engaged in the implementation of internal controls (hereafter, IC personnel) and the number of IC personnel in accounting, finance, information technology and systems departments, and other related functional areas. Using data unique to Korea, this study examines the effect of human resource investment in internal control on audit reporting lag (ARL). We employ quantitative and qualitative measures for the IC personnel, and the ARL is measured by the time between the fiscal year-end and the audit report date. We find an insignificant association between the quantitative measure (the number of IC personnel) and ARL. On the other hand, we find that the qualitative measure (the average experience of the IC personnel) reduces the audit time, thereby decreasing the ARL. This result highlights the importance of qualitative aspect in investments in IC personnel, which could be useful for firms that desire to reap the best result from the investment. Further analysis shows that investments in IC personnel at other departments as well as accounting and finance department increase audit efficiency. We confirm the robustness of our results through a series of additional analyses.

Original languageEnglish
Pages (from-to)195-215
Number of pages21
JournalAsia-Pacific Journal of Accounting and Economics
Issue number1-2
Publication statusPublished - 2017 Apr 3

Bibliographical note

Publisher Copyright:
© 2016 City University of Hong Kong and National Taiwan University.

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


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