Abstract
This study examines whether audit report lag (ARL) is determined by certain auditor-related factors. Understanding the determinants of ARL is important as ARL is the single most important factor in determining the timing of earnings releases and, therefore, improving the timeliness of companies' announcements of earnings. Unlike prior studies, we are particularly interested in examining various auditor-related factors including audit and non-audit fees received from clients, auditor tenure, type of auditor and audit opinion. Using a recent Korean sample, we find that ARL is negatively associated with non-audit fees paid to incumbent auditors, consistent with "knowledge spillover" from the provision of non-audit services. We also find that ARL is negatively associated with the use of Big 4 auditors and unqualified audit opinions. We are, however, not able to find significant associations between ARL and auditor tenure, or abnormal audit fees paid to incumbent auditors. Additional analyses provide evidence that abnormal audit hours and the provision of tax services, and services relating to the design of internal control systems, significantly reduce ARL.
| Original language | English |
|---|---|
| Pages (from-to) | 27-44 |
| Number of pages | 18 |
| Journal | Journal of Applied Business Research |
| Volume | 24 |
| Issue number | 2 |
| Publication status | Published - 2008 Jun 1 |
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All Science Journal Classification (ASJC) codes
- Business and International Management
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Determinants of audit report lag : Evidence from Korea - An examination of auditor-related factors. / Lee, Ho Young; Jahng, Geum Joo.
In: Journal of Applied Business Research, Vol. 24, No. 2, 01.06.2008, p. 27-44.Research output: Contribution to journal › Article
TY - JOUR
T1 - Determinants of audit report lag
T2 - Evidence from Korea - An examination of auditor-related factors
AU - Lee, Ho Young
AU - Jahng, Geum Joo
PY - 2008/6/1
Y1 - 2008/6/1
N2 - This study examines whether audit report lag (ARL) is determined by certain auditor-related factors. Understanding the determinants of ARL is important as ARL is the single most important factor in determining the timing of earnings releases and, therefore, improving the timeliness of companies' announcements of earnings. Unlike prior studies, we are particularly interested in examining various auditor-related factors including audit and non-audit fees received from clients, auditor tenure, type of auditor and audit opinion. Using a recent Korean sample, we find that ARL is negatively associated with non-audit fees paid to incumbent auditors, consistent with "knowledge spillover" from the provision of non-audit services. We also find that ARL is negatively associated with the use of Big 4 auditors and unqualified audit opinions. We are, however, not able to find significant associations between ARL and auditor tenure, or abnormal audit fees paid to incumbent auditors. Additional analyses provide evidence that abnormal audit hours and the provision of tax services, and services relating to the design of internal control systems, significantly reduce ARL.
AB - This study examines whether audit report lag (ARL) is determined by certain auditor-related factors. Understanding the determinants of ARL is important as ARL is the single most important factor in determining the timing of earnings releases and, therefore, improving the timeliness of companies' announcements of earnings. Unlike prior studies, we are particularly interested in examining various auditor-related factors including audit and non-audit fees received from clients, auditor tenure, type of auditor and audit opinion. Using a recent Korean sample, we find that ARL is negatively associated with non-audit fees paid to incumbent auditors, consistent with "knowledge spillover" from the provision of non-audit services. We also find that ARL is negatively associated with the use of Big 4 auditors and unqualified audit opinions. We are, however, not able to find significant associations between ARL and auditor tenure, or abnormal audit fees paid to incumbent auditors. Additional analyses provide evidence that abnormal audit hours and the provision of tax services, and services relating to the design of internal control systems, significantly reduce ARL.
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UR - http://www.scopus.com/inward/citedby.url?scp=42549100867&partnerID=8YFLogxK
M3 - Article
VL - 24
SP - 27
EP - 44
JO - Journal of Applied Business Research
JF - Journal of Applied Business Research
SN - 0892-7626
IS - 2
ER -