How Timely is Financial Reporting in China? An Empirical Study

Abstract

Timeliness of financial reporting is one of the attributes of good corporate governance identified by the OECD and World Bank. Shareholders and other stakeholders need information while it is still fresh and the more time that passes between year-end and disclosure, the more stale the information becomes and the less value it has.

This paper examines the timeliness of financial reporting in the People's Republic of China. The timeliness of financial reporting was measured by counting the number of days that elapsed between year-end and the date of the independent auditor's report for a number of Chinese companies. Those results were then compared to data of non-Chinese companies in developed market economies to determine whether there was a significant difference. This study also examines which independent audit firms issued the audit opinion to determine which audit firms dominate.

Keywords: timeliness, financial reporting, corporate governance, China, GAAP, accounting, transition economy

JEL Classification: D80, G34, K22, M4, O53