The Effect of CEO Turnover Type and CEO Succession Origin on Audit Report Lag in Firms Listed on the Tehran Stock Exchange
Keywords:
Type of CEO Turnover, CEO Succession Origin, Audit Report LagAbstract
This study aims to examine the effect of CEO turnover type (voluntary and forced) and CEO succession origin (insider and outsider) on audit report lag. This research is applied in purpose and descriptive–correlational in method, using an ex-post facto design. The statistical population consists of all firms listed on the Tehran Stock Exchange during the period 2016–2021. Using a systematic elimination approach, a final sample of 139 firms comprising 834 firm-year observations was selected. Data were extracted from archival financial databases and analyzed using panel data regression techniques. The Chow and Hausman tests were employed to determine the appropriate model specification, and based on the results, the fixed-effects model was estimated using the generalized least squares method. Audit report lag was considered the dependent variable, while the independent variables included CEO turnover, turnover type (voluntary and forced), and CEO succession origin (insider and outsider), along with a comprehensive set of financial and governance control variables. The results indicate that CEO turnover has a positive and statistically significant effect on audit report lag. Voluntary CEO turnover also leads to a significant increase in audit report lag, whereas forced CEO turnover does not exhibit a statistically significant effect. Furthermore, outsider CEO succession significantly increases audit report lag, while insider succession shows no significant association. Additional analyses reveal that the combination of either voluntary or forced CEO turnover with outsider succession produces the greatest delay in audit report issuance, whereas voluntary turnover followed by insider succession reduces audit report lag. The findings suggest that auditors jointly consider both the nature of CEO turnover and the origin of the successor when assessing audit risk, and these factors play a critical role in determining the timing of audit completion and report issuance.
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Copyright (c) 2025 Amirali Abbaspour (Author); Razieh Alikhani (Corresponding author); Mehdi Maranjory , Reza Fallah (Author)
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