The effect of managerial ability on financial reporting timeliness : Egypt evidence

Abstract

Purpose: The main objective of this study is to measure the effect of managerial ability on financial reporting timeliness in Egypt.

Methodology: We analyzed a sample of Egyptian firms listed on the EGX100 index, the final sample was 62 firms during the period 2014 - 2018, we measured managerial ability depending on data envelope analysis (DEA) presented by Demerjian et al. (2012). The data was analyzed through the OLS method.

Findings: Under the resource-based theory, we expect that higher ability managers own the utmost human capital, they are more able to maintain good internal control systems and provide higher earnings quality. Consequently, we predict that higher ability managers provide financial statements in a timely manner. The results confirm a negative relationship between managerial ability and financial reporting lag.

Originality/Value: Our results provide insights to researchers, investors, regulators, auditors, and other stakeholders in emerging economies to understand and perceive the implications of managerial ability on financial reporting timeliness.