The association between audit quality, accounting disclosures and firm-specific risk: Evidence from initial public offerings

Lee, Philip; Stokes, Donald J.; Taylor, Stephen L.; Walter, Terry S.

doi:10.1016/j.jaccpubpol.2003.08.003

Cited by 84 publications

(73 citation statements)

References 22 publications

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“…The estimation risk pertaining to IPO firms thus has a different source and resolution than that for distressed firms. Furthermore, research (Lee et al, 2003;Bukh et al, 2005) finds a significant increase in disclosures pre-IPO; it is possible that investors expect such marketing-oriented increases and do not expect them to persist in the same way that they would for an alreadylisted firm. In this event, the costs -in terms of the implied commitment to higher disclosure -for the IPO firms would be significantly less than for an already-listed firm.…”

Section: Discussionmentioning

confidence: 99%

The Association between Disclosure, Distress, and Failure

Holder‐Webb

Cohen

2007

J Bus Ethics

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Section: Discussionmentioning

confidence: 99%

The Association between Disclosure, Distress, and Failure

Holder‐Webb

Cohen

2007

J Bus Ethics

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“…Several empirical studies show that listed companies tend to require higher audit quality and timely disclosure (Lee, Stokes, Taylor, & Walter, 2003). A differentiated audit quality positively affects the confidence of investors in the information certified by the auditor and potentially determines the value of securities traded introduced (Titman & Trueman, 1986;Datar, Feltham, & Hughes, 1991;Lee et al, 2003).…”

Section: Timely Disclosure and The Cost Of Debtmentioning

confidence: 99%

“…A differentiated audit quality positively affects the confidence of investors in the information certified by the auditor and potentially determines the value of securities traded introduced (Titman & Trueman, 1986;Datar, Feltham, & Hughes, 1991;Lee et al, 2003). Thus, we test the following hypothesis:…”

Section: Timely Disclosure and The Cost Of Debtmentioning

confidence: 99%

Audit Quality, Timely Disclosure, and the Cost of Debt: Tunisian Evidence

Achek¹,

Gallali²

2015

JMAA

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The aim of this study is to investigate the effect of auditor type and earnings reporting lag on the cost of debt for the Tunisian setting. Our sample consists of 32 Tunisian companies for the period of 2003-2012. Audit quality is measured by auditor size (Big 4 versus non-Big 4) and timely disclosure is proxied by earnings reporting lag.Results show that auditor type is negatively associated with the cost of debt. By contrast, the association between earnings announcement lag and the cost of debt is positive and significant. When testing for the moderating effects of industry and listing status, we document that these associations are more pronounced for industrial companies and listed firms. Finally, the period of investigation slightly moderates the examined associations, since financial institutions become more sensitive to the tardy communication of information and less concerned with auditor type following some economic and political troubles in Tunisia between 2010 and 2012. Our findings have policy implications for managers in the Tunisian setting and other developing economies similar to Tunisia given the crucial role played by debt as an important source of external finance for companies.

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“…Prior accounting studies examined the associations between corporate governance and the broad proxies of financial reporting quality such as fraudulent financial reporting, voluntary disclosure, accrual quality, earnings management and conservatism (Ahmed and Duellman, 2007;Cheng and Courtenay, 2006;Dechow et al, 1996;Eng and Mak, 2003;Lee et al, 2003;Peasnell et al, 2005). In contrast, this study examines the role of corporate governance in the context of the implementation of a particular IFRS, as studies on the role of corporate governance in accounting decisions under IFRS are relatively sparse.…”

Section: Introductionmentioning

confidence: 99%

The role of corporate governance in accounting discretion under IFRS: Goodwill impairment in Australia

Kabir

Rahman

2016

Journal of Contemporary Accounting & Economics

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A major concern with the adoption of International Financial Reporting Standards (IFRS) is the accounting discretion allowed under the IFRS, and its potential opportunistic use by managers. We examine the role of corporate governance in the accounting discretion inherent in goodwill impairment decisions under the IFRS. More specifically, we investigate whether, in Australia, stronger governance strengthens associations between economic factors and goodwill impairment loss but weakens associations between contracting incentives and goodwill impairment loss. Using data from 2007 to 2012, we find evidence consistent with the notion that stronger governance enhances the associations between economic factors and goodwill impairment loss. However, we find that strong governance cannot completely eliminate the opportunistic use of discretion in an impairment decision, especially when pre-impairment income is negative, and when the impairment occurs in the first year of a CEO's tenure. Our results are robust with regards to alternative measures of the dependent variable, firm performance variables, and the governance variable, even after controlling for potential self-selection biases.JEL Classification: G34, M41

show abstract

The association between audit quality, accounting disclosures and firm-specific risk: Evidence from initial public offerings

Cited by 84 publications

References 22 publications

The Association between Disclosure, Distress, and Failure

The Association between Disclosure, Distress, and Failure

Audit Quality, Timely Disclosure, and the Cost of Debt: Tunisian Evidence

The role of corporate governance in accounting discretion under IFRS: Goodwill impairment in Australia

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