Audit Report Lag. Differential Analysis between Spanish SMEs and Non-SMEs

Escaloni, Susana; Mareque, Mercedes

doi:10.3390/su132212830

Cited by 8 publications

(13 citation statements)

References 67 publications

(127 reference statements)

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“…Recent financial scandals globally have also raised concerns about the ability to rely on financial statements. In addition, the pressure of financial crises in many countries has increased the demand for high-quality auditing during recent years (Zureigat 2011;Kim 2021;Escaloni and Mareque 2021;Lukason and Camacho-Miñano 2021;Lukason and Camacho-Miñano 2019). Due to terrible financial scandals of companies such as Enron and WorldCom in the United States or Pacific Electric Wire & Cable and Summit Technology in Taiwan (Chen 2016), as well companies in the European financial crisis such as Parmalat in Italy, Ahold in the Netherlands, and Gescartera & BBVA in Spain, reliance on financial statements and audit work has been mistrustful (Pucheta-Martínez and Fuentes 2007).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Mandatory Audit Firm Rotation on Earnings Management and Audit Fees: Evidence from Iran

Salehi

Zimon

Tarighi

et al. 2022

JRFM

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The present study aims to investigate the effects of mandatory requirements of audit firm rotation on earnings management among companies listed on the Tehran Stock Exchange (TSE). The study population consists of 1030 observations and 103 companies listed on the TSE during the years 2003–2012; moreover, the statistical technique used to test the hypotheses is panel data and pooled data. The results showed that the rule of mandatory audit firm rotation increased accruals-based earnings management (AEM) significantly. In addition, outcomes demonstrated that mandatory requirements of audit firm rotation did not have a significant influence on real earnings management (REM) and audit fees. Overall, our findings proved that the mandatory requirements of audit firm rotation in Iran have not been able to prevent the opportunistic actions of management at a time when they were faced with severe financial problems because of economic sanctions and auditors taking standardized systems-based auditing approaches. This research will make investors and others aware of the fact that mandatory audit firm rotation might be not effective in stopping managers wishing to manipulate the accounting figures. This paper actually suggests that when firms have financial distress, regulatory mechanisms such as audit firm rotation may not have a deterrent role. Our findings give lawgivers a stark warning that the length of an audit firm’s tenure should be based on the features of the audit market structure of each country.

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Section: Introductionmentioning

confidence: 99%

The Effect of Mandatory Audit Firm Rotation on Earnings Management and Audit Fees: Evidence from Iran

Salehi

Zimon

Tarighi

et al. 2022

JRFM

View full text Add to dashboard Cite

show abstract

“…As already noted in the introduction, most prior research on accounting timeliness has been based on data from public firms. Recently, however, a couple of studies have investigated timeliness among private firms in the UK (Clatworthy and Peel, 2016), Belgium (Luypaert et al, 2016;Selleslagh et al, 2021), Estonia (Lukason and Camacho-Miñano, 2019, 2020 and Spain (Escaloni and Mareque, 2021). Using a sample of Belgian private firms, Selleslagh et al (2021) found a negative association between financial health and late filing of financial statements (i.e.…”

Section: Previous Researchmentioning

confidence: 99%

“…More specifically, this paper focuses on the relationship between auditing/non-auditing and timeliness using a sample of Swedish private firms. Of the prior studies within this field that have analyzed timeliness in private firms (Clatworthy and Peel, 2016; Escaloni and Mareque, 2021; Lukason and Camacho-Miñano, 2019, 2020, 2021; Luypaert et al , 2016; Selleslagh et al , 2021), only two (Clatworthy and Peel, 2016; Luypaert et al , 2016) considered the association between audit, non-audit and timeliness. This is somewhat surprising given that auditing is a potent corporate governance mechanism.…”

Section: Introductionmentioning

confidence: 99%

The relation between auditing and accounting timeliness in Swedish private firms

Hartwig

Hansson

Nielsen

et al. 2023

JFRC

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Purpose The purpose of this study is to examine the relationship between auditing/non-auditing and accounting timeliness among Swedish private firms. Design/methodology/approach This paper uses regression analysis to test the relationship between auditing and two measurements of timeliness; lead time and late filing. The sample consists of Swedish private firms. Findings This paper finds that audited firms, when compared with unaudited firms, are significantly less timely. Moreover, greater profitability was associated with more timeliness but only for audited firms. The results of this paper also show that firms being audited by a big 4 auditor are significantly timelier than firms being audited by a non-big 4 auditor. Practical implications The findings in this paper suggests that one aspect of accounting quality, timeliness, does not seem to benefit from auditing in a Swedish context. There is a debate about whether the threshold levels in Sweden should be raised so that more firms voluntarily can opt out of audit. Those opposing a raised threshold level claim that auditing has positive effects on accounting quality and consequently that a raised level would have adverse effects. The findings in this paper do not support such a claim. Originality/value Little is known about timeliness in private firms compared to public firms and this paper fills that void. Contrary to prior research, findings show that unaudited firms in a Swedish regulatory setting actually are timelier than their audited counterparts. This questions one of the (presumed) benefits of auditing and should stimulate more research on this issue.

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“…Lukason and Camacho-Miñano (2019) showed that companies with a higher risk of bankruptcy are more likely to delay submitting their annual reports. Escaloni and Mareque (2021) showed a relationship between the likelihood of bankruptcy and audit report lag. Factors related to audit report lag differ depending on whether a company is in the SME category.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

The Way Financial Distress Affects Financial Reporting Delay

Nurquran

Ardianto

2023

J. Theor. Appl. Manage.

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Objective: Previous studies identified a significant effect of financial distress experienced by a company on the delay in submitting its audited financial report. However, no analysis to identify whether the effect is direct or indirect by decomposing the total effect calculated. This study conducted further analysis aiming to reveal the mechanism of the way financial distress affects financial reporting delay, whether the effect is entirely direct or there is a portion of indirect effect, by decomposing the total effect using the quality of financial report as a mediating factor. Design/Methods/Approach: Public companies listed at Indonesian Stock Exchange (IDXI), whichever delay in submitting audited financial reports were targeted population, the purposive sampling method was implemented to collect financial reports within the 2014-2020 period. Logistic regression, linear regression, and a technique to decompose the effect into four components under the mediation model are analysis methods. In addition, the quality of the financial report measured by the Beneish Score was used as a mediator variable. Findings: This study found that the more severe the financial distress experienced by a company, the more likely it will delay submitting its audited financial report. Although there is an indication that financial distress affects the quality of the financial report, however no significant evidence that the quality of the financial report mediates some of the effects of financial distress on financial reporting delay. In other words, the effect of financial distress is direct. Originality/Value: This study delivered new insight by including financial reporting quality as a potential mediating variable in the relationship between financial distress and financial reporting delay. The existence of mediating variable allowed us to decompose the total effect of financial distress on the financial reporting delay and identify whether financial distress's effect on financial reporting delay is direct or indirect. The identification of direct and indirect effects will reveal the mechanism of how financial distress effects affect financial reporting delay. The researchers expected to add new insight, where the use of financial reporting quality as a mediating variable was expected to reveal the mechanism of the relationship between financial distress and financial reporting delay. This study evaluates the relationship between financial distress experienced by companies, financial reporting quality, and financial reporting delay. Practical/Policy implication: The findings of this study suggest that investors have to be more careful in investment decision-making on public companies that delay submitting their audited financial reports, and regulators have to strengthen protection for investors.

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Audit Report Lag. Differential Analysis between Spanish SMEs and Non-SMEs

Cited by 8 publications

References 67 publications

The Effect of Mandatory Audit Firm Rotation on Earnings Management and Audit Fees: Evidence from Iran

The Effect of Mandatory Audit Firm Rotation on Earnings Management and Audit Fees: Evidence from Iran

The relation between auditing and accounting timeliness in Swedish private firms

The Way Financial Distress Affects Financial Reporting Delay

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