Determinants of audit report lag

Evidence from Korea - An examination of auditor-related factors

Ho Young Lee, Geum Joo Jahng

Research output: Contribution to journalArticle

8 Citations (Scopus)

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 languageEnglish
Pages (from-to)27-44
Number of pages18
JournalJournal of Applied Business Research
Volume24
Issue number2
Publication statusPublished - 2008 Jun 1

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Korea
Auditors
Lag
Factors
Audit reports
Auditor tenure
Audit
Incumbents
Non-audit fees
Audit opinion
Audit fees
Big 4
Internal control system
Tax
Timeliness
Knowledge spillovers
Nonaudit services
Announcement

All Science Journal Classification (ASJC) codes

  • Business and International Management

Cite this

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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 journalArticle

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