The impact of accelerated filing requirements on meeting audit report deadlines

2017 ◽  
Vol 30 (01) ◽  
pp. 58-72 ◽  
Author(s):  
Magdy Farag
Keyword(s):  
Audit Report ◽  
Public Accounting ◽  
Control Variables ◽  
Accounting Firms ◽  
Indicator Variable ◽  
Content Type ◽  
Audit Reports ◽  
Measuring Tool ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this study is to examine audit report lags and audit report deadline margins. It specifically examines whether audits of large accelerated filers are completed within a shorter period as compared with regular accelerated filers due to the introduction of new deadline filing requirements by the SEC. The paper also examines whether large accelerated filers have shorter audit report deadline margins. Design/methodology/approach Using a sample of 7,129 firm-year observations over the period 2007-2013, an OLS regression model is applied by regressing audit report lags and audit report deadline margins on an indicator variable for large accelerated filers and a set of control variables. Findings Results indicate that audits of large accelerated filers have shorter audit report lags as compared with regular accelerated filers. Also, large accelerated filers have shorter audit report deadline margins as compared with regular accelerated filers. These results suggest that even though large accelerated filers’ audits are more complex by nature, auditors of these firms are under more pressure to complete their audits and issue their clients’ audit reports on time. Research limitations/implications While the control variables included in the models are all based on established theories and validated in prior research, there may still be some control variables that were excluded from the study’s models. Also, these results cannot be generalized beyond firms that are categorized as large accelerated filers or accelerated filers. Practical/implications Public accounting firms should be prepared to devote more resources to large accelerated filers’ clients. Also, regulators might need to reconsider revising the filing deadline requirements for the new category of large accelerated filers by weighing the pros against the cons of these new deadlines, as it appears that auditors of large accelerated filers need more time to complete their audits. Originality/value This study uses a new measuring tool in addition to audit report lags, which is the ‘audit report deadline margin’.

scholarly journals Exploring Changing Requirements of Financial Statement Audit Reports via a Morphogenetic Approach

2021 ◽  
Vol 15 (2) ◽  
pp. 38-55
Author(s):  
Ying Deng ◽  
Graham Bowrey ◽  
Greg Jones
Keyword(s):  
Financial Statement ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Financial Statement Audit ◽  
Audit Regulation ◽  
Financial Audit ◽  
Proposed Regulation ◽  
Audit Reports ◽  
The Impact

There has been an ongoing concern with the quality of financial audit reports issued by registered public accounting firms in relation to financial accountability and transparency of the financial statements. In July 2009 the Public Accounting Oversight Board (PCAOB) released a concept paper outlining changes to the requirements of financial audit activities such as the inclusion of the engagement partner’s signature on the financial audit reports. The aim of these new requirements was to improve the accountability of engagement partners as well as enhance the perception of transparency of the audit reports. However, the contribution and effectiveness of these requirements to improve accountability and transparency of audit reports for various stakeholders relying on the audited financial information is questionable. This study explores the impact and effectiveness of changes to auditing regulation and processes through the application of Archer’s (1995) morphogenetic approach which is based on social conditioning, social interaction, and social elaboration where the structural influences provides the environment for agents to differentiate themselves. In addition, this study demonstrates how proposed regulation changes mould the qualities of audit regulation, the profession and the auditor whose perspectives deserved to be noticed from the dominant constituencies structured by the propositions of a morphogenetic analysis.

scholarly journals Impact of external assurance on corporate climate change disclosures: new evidence from Finland

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Probal Dutta ◽  
Anupam Dutta
Keyword(s):  
Climate Change ◽  
Information Asymmetry ◽  
Voluntary Disclosure ◽  
Positive Impact ◽  
Tobit Regression ◽  
Control Variables ◽  
Accounting Firms ◽  
Content Type ◽  
Corporate Managers ◽  
The Impact

PurposeThe purpose of this research is to examine the impact of external assurance on the level of voluntary corporate climate change disclosures by Finnish firms.Design/methodology/approachThe sample of this study includes 228 firm-year observations over the period 2008–2015 for listed Finnish companies that have issued sustainability reports and responded to the Carbon Disclosure Project (CDP) questionnaire at least once during the sample period. The authors conduct a panel regression analysis to study the afore-mentioned linkage. In addition, the Tobit regression model is also estimated to check the robustness of our findings.FindingsThe findings suggest that assurance has a highly significant positive impact on the level of corporate climate change disclosures even after controlling for the effect of a number of control variables. Moreover, among the control variables, firm size and asset age are found to have significant effect on the extent of carbon emissions disclosure. Furthermore, the additional analysis reveals that the type of assurance providers (accounting firms vs non-accounting firms) and the type of financial auditors (Big4 financial auditors vs non-Big4 financial auditors) do not influence the level of climate change disclosure of assured companies.Research limitations/implicationsThis research is subject to certain limitations. First, the source of the data used in this research is the CDP database which has limitations in that it is a voluntary disclosure process where all the observations collected are self-reported by the responding firms. This may bias the reported findings. Second, our sample includes only listed companies and hence the results might have limited explanatory capacity for unlisted firms.Practical implicationsBy using the results of this research, corporate managers will be able to reduce the information asymmetry between various stakeholders and them through disclosure of accurate, reliable and credible environmental information. Such disclosures will, in turn, allow socially responsible investors to choose eco-friendly investments and will thus enable them to make appropriate investment decisions.Originality/valueResearch on the external assurance-corporate climate change disclosure nexus is scarce. This study addresses this gap in the nonfinancial disclosure assurance literature by demonstrating that external assurance increases the level of voluntary corporate climate change disclosure. Drawing on stakeholder-agency theory, this study views external assurance as a monitoring structure that potentially curbs the monitoring problem between corporate managers and other stakeholders and increases the amount of climate change disclosures making a possible avenue for the reduction of the information asymmetry between them.

Supervisor workplace gossip and its impact on employees

2018 ◽  
Vol 33 (1) ◽  
pp. 93-105 ◽  
Author(s):  
Chien-Chih Kuo ◽  
Chih-Ying Wu ◽  
Chia-Wu Lin
Keyword(s):  
Communication Style ◽  
Control Variables ◽  
Content Type ◽  
Member Exchange ◽  
Research Findings ◽  
And Control ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to explore the role of supervisor gossip in the workplace. This paper proposes a hypothetical model in which supervisor gossip has an effect on leader-member exchange (LMX), in turn resulting in perceived supervisor ostracism among subordinates. Design/methodology/approach A dyadic research design was applied to collect data from Taiwanese employees. Supervisors participated in a survey containing measures of supervisor gossip and control variables, whereas subordinates responded to a questionnaire on LMX, perceived supervisor ostracism, and control variables. Findings The results indicated that positive supervisor gossip significantly affected LMX. Furthermore, healthy LMX reduced subordinates’ perceptions of supervisor ostracism. Research limitations/implications All participants were recruited in Taiwan, which is a limitation for generalising the research findings. Future studies should investigate multiple societies of various cultural profiles. Practical implications To improve the quality of the supervisor-subordinate relationship, supervisors should adopt a positive informal communication style, and organisations should provide supervisors with information regarding the implications of workplace gossip, illustrating the substantial benefits of positive gossip and the potential drawbacks of negative gossip. Originality/value The present study highlighted the role of supervisor workplace gossip in the field of leadership and empirically investigated the impact of supervisor gossip on subordinates’ reactions.

scholarly journals Audit deficiency and auditor workload: evidence from PCAOB triennially inspected firms

2017 ◽  
Vol 16 (4) ◽  
pp. 478-496 ◽  
Author(s):  
C. Janie Chang ◽  
Yan Luo ◽  
Linying Zhou
Keyword(s):  
Financial Statements ◽  
Professional Staff ◽  
Public Accounting ◽  
Firm Level ◽  
Accounting Firms ◽  
Content Type ◽  
Resource Information ◽  
Subsequent Period ◽  
Public Accounting Firms ◽  
The Impact

Purpose The purpose of this study is to examine the impact of workloads at public accounting firms on the likelihood of an audit deficiency being identified during a triennial inspection by the Public Company Accounting Oversight Board (PCAOB). Design/methodology/approach Using the human resource information disclosed in PCAOB inspection reports, this study constructs two firm-specific workload measures: the ratio of issuer clients to audit partners; and the ratio of issuer clients to professional staff. Firm-level audit deficiency is measured at three levels of severity: Do any of the audit engagements inspected by the PCAOB reveal an audit deficiency? Are any of the identified audit deficiencies directly related to the auditors’ failure to identify a departure from GAAP in the client’s financial statement? Are any of the identified audit deficiencies associated with a significant adjustment or restatement in the client’s subsequent period financial statements? This study uses logistic regression to examine the association between audit deficiency and the workload of public accounting firms. Findings The empirical evidence suggests that the workload of public accounting firms is positively associated with the likelihood of a deficient audit, auditor’s failure to identify client’s GAAP departure and/or an audit deficiency resulting in a significant adjustment or even a restatement of the client’s financial statements in the subsequent period. Originality/value This study is among the first to investigate the impact of firm workload on deficient audits.

Audit report qualification/modification

2017 ◽  
Vol 7 (4) ◽  
pp. 468-485 ◽  
Author(s):  
Hanen Moalla
Keyword(s):  
Financial Crisis ◽  
Positive Relationship ◽  
Audit Report ◽  
Content Type ◽  
Audit Opinion ◽  
Publicly Traded Companies ◽  
Financial Variables ◽  
Audit Reports ◽  
Qualified Audit Opinion ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the influence of financial variables and especially profitability, loss in current year, loss in previous year, leverage and liquidity in predicting audit report qualifications (qualified audit opinion) and audit report modifications (qualified opinion or unqualified but with an explanatory paragraph). Design/methodology/approach The authors used hand-collected data from financial statements and from auditors’ general reports of 76 non-financial publicly traded companies over a period of 11 years (2005-2015). A total of 545 audit reports were analyzed. Findings The results of panel logistic regression reported a positive relationship between liquidity, loss in the current year, loss in the previous year and a qualified audit report. A positive relationship was found between leverage and audit report modification. Also, the findings show that the Tunisian revolution did not affect the qualification or the modification of the audit report but qualifications decreased significantly during the period of the financial crisis. Practical implications The research has practical implications and can help auditors in identifying factors motivating audit report qualification or audit report modification, mainly in periods of instability. Originality/value This study contributes to auditing research, since the authors know very little about the determinants of audit opinion in emerging and African markets. It constitutes an addition to previous knowledge about audit opinion in the context of Tunisia during two important periods: the financial crisis and revolution. This research is one of the rare studies analyzing qualifications and audit report modifications by considering both qualifications and explanatory paragraphs.

The impact of legitimacy threaton the choice of external carbon assurance

2019 ◽  
Vol 32 (2) ◽  
pp. 181-202 ◽  
Author(s):  
Ragini Rina Datt ◽  
Le Luo ◽  
Qingliang Tang
Keyword(s):  
Climate Change ◽  
Carbon Emissions ◽  
Design Methodology ◽  
Legitimacy Theory ◽  
Accounting Firms ◽  
Content Type ◽  
The Us ◽  
Emissions Intensity ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this study is to examine the impact of legitimacy threats on corporate incentive to obtain external carbon assurance. Design/methodology/approach The sample consists of the largest US companies that disclosed carbon emissions to CDP (formerly the Carbon Disclosure Project) over the period 2010-2013. Based on legitimacy theory, firms are more likely to obtain carbon assurance when they are under greater legitimacy threat. Carbon assurance is measured using CDP data. Three proxies are identified to measure legitimacy threat related to climate change: carbon emissions intensity, firm size and leverage. Findings This paper finds that firms with higher levels of emissions are more likely to obtain independent assurance, and large firms show the same tendency, as they are probably under pressure from their large group of stakeholders. In sum, the findings suggest that firms with higher carbon emissions face greater threats to their legitimacy, and the adoption of carbon assurance can mitigate risks to legitimacy with enhanced credibility of carbon disclosure in stakeholders’ decision-making. Research limitations/implications The study has some limitations. The authors have relied on CDP reports for analysis and focus on the largest companies in the US. Caution should be exercised when generalising the results to smaller firms, other countries or voluntary carbon assurance information disclosed in other communications channels. Practical implications This study provides extra insights into and an improved understanding of determinants and motivation of carbon assurance, which should be useful for policymakers to develop policies and initiatives for carbon assurance. The collective results should be useful for practicing accountants and accounting firms. Originality/value The paper investigates how legitimacy threats affect firms’ choice of external carbon assurance in the context of US, which has not been documented previously. It contributes to the understanding of legitimacy theory in the context of voluntary carbon assurance.

scholarly journals Influencing Factors of Audit Report Lag: Evidence from Indonesia

2020 ◽  
Vol 9 (6) ◽  
pp. 148
Author(s):  
Zaky Machmuddah ◽  
Adhin Fauziah Iriani ◽  
St. Dwiarso Utomo
Keyword(s):  
Financial Services ◽  
Sampling Method ◽  
Stock Exchange ◽  
Secondary Data ◽  
Audit Report ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
The Public ◽  
Audit Reports

This study intends to reveal the influence of firm size, profitability, solvability, and size of the public accounting firm on audit report lag (ARL). The object of this research is mining firms listed on the Indonesia Stock Exchange (IDX) for the 2015-2018 period. Samples were chosen by purposive sampling method, uses secondary data with 96 samples, and applies multiple linear regression for data analysis. The finding of this research indicates that the solvability and size of public accounting firms influence the ARL. However, firms' size and profitability don't influence the ARL. The implication of the finding is issuers should pay attention to factors that affect ARL so that issuers are not subject to sanctions due to delays in the submission of audit reports from Financial Services Authority (OJK).

Audit report forecast: an application of nonlinear grey Bernoulli model

2018 ◽  
Vol 8 (3) ◽  
pp. 295-311 ◽  
Author(s):  
Mahdi Salehi ◽  
Nastaran Dehnavi
Keyword(s):  
Forecasting Model ◽  
Bernoulli Model ◽  
Audit Report ◽  
Data Set ◽  
Widespread Application ◽  
Content Type ◽  
Grey Forecasting ◽  
Grey Forecasting Model ◽  
Audit Reports ◽  
The Impact

Purpose The widespread application of traditional grey model (GM) in different academic fields such as electrical engineering, education, mechanical engineering and agriculture provided the authors with an incentive to conduct the present empirical research in an accounting field, in particular, auditing practice. In this regard, the purpose of this paper is to employ the nonlinear type of the original GM to forecast the drastically changed data on audit reports, primarily due to the fact that the linear nature of GM is unable to forecast nonlinear data precisely. In essence, this paper adds value to the strand of audit report literature by examining the impact of different financial ratios on auditors’ opinion and then forecasting audit reports by employing GMs. Design/methodology/approach The grey forecasting model is known as a system containing uncertain information presented by grey numbers, equations and matrices. The grey forecasting model is employed by using a differential equation in an uncertain system with limited data set which is suitable for smoothing discrete data. In addition, the analyses are conducted by applying a sample of top 50 listed companies on the Tehran Stock Exchange during 2011-2016. Findings The findings suggest that audit reports are most influenced by the current ratio and conversely, least influenced by the ratio of working capital turnover. Moreover, the authors argue that the Nash nonlinear grey Bernoulli model is more precise than the nonlinear grey Bernoulli model and GM in forecasting audit reports. Originality/value The current study may give more strength to stakeholders in order to analyse and forecast audit report.

Perceived workplace gender-bias and psychological impact

2019 ◽  
Vol 43 (3/4) ◽  
pp. 339-353 ◽  
Author(s):  
Siham Lekchiri ◽  
Cindy Crowder ◽  
Anna Schnerre ◽  
Barbara A.W. Eversole
Keyword(s):  
Gender Bias ◽  
Critical Incident ◽  
Psychological Impact ◽  
Working Women ◽  
Content Type ◽  
Treatment Bias ◽  
Male Dominated ◽  
The Impact ◽  
Organizational Mechanisms ◽  
Practical Implications

Purpose The purpose of this paper is to explore the experiences of working women in a male-dominated country (Morocco) and unveil the unique challenges and everyday gender-bias they face, the psychological impact of the perceived gender-bias and, finally, identify a variety of coping strategies or combatting mechanisms affecting their motivation and retention in the workplace. Design/methodology/approach Empirical evidence was obtained using a qualitative research method. The Critical Incident Technique (CIT) was used to collect incidents recalled by women in the select institution reflecting their perceptions of their managers’ ineffective behaviors towards them and the impact of these behaviors. The critical incidents were inductively coded, and behavioral statements were derived from the coded data. Findings The qualitative data analysis led them to structure the data according to two theme clusters: The perceived gender-bias behaviors (Covert and evident personal and organizational behaviors) and Psychological impacts resulting from the perceived bias. These behavioral practices included abusive behaviors, unfair treatment, bias and lack of recognition. The psychological impact elements involved decreased productivity, depression, anxiety and low self-esteem. Practical implications Understanding these experiences can facilitate the identification of strategies geared towards the retention of women in the workforce, and Moroccan organizations can develop and implement strategies and policies that are geared towards eliminating gender-bias in the workplace and to retaining and motivating women who remain ambitious to work in male-dominated environments and cultures. Originality/value This paper provides evidence that sufficient organizational mechanisms to support women in male-dominated environments are still unavailable, leaving them to find the proper coping mechanisms to persevere and resist.

Embedding employability within higher education for the profession of policing

2019 ◽  
Vol 9 (3) ◽  
pp. 319-328
Author(s):  
Ian Pepper ◽  
Ruth McGrath
Keyword(s):  
Higher Education ◽  
Design Methodology ◽  
Research Study ◽  
Longitudinal Research ◽  
Evidence Base ◽  
Content Type ◽  
Educational Provision ◽  
Professional Body ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to evaluate the impact of an employability module, the College of Policing Certificate in Knowledge of Policing (CKP), on students’ career aspirations, their confidence and wish to join the police along with the appropriateness of the module. This will inform the implementation of employability as part of the College of Policing-managed Police Education Qualifications Framework (PEQF). Design/methodology/approach A three-year longitudinal research study used mixed methods across four points in time to evaluate the impact on students studying the employability module. Findings The research suggests that the employability-focussed CKP was useful as an introduction to policing, it developed interest in the police and enhanced the confidence of learners applying to join. Lessons learnt from the CKP should be considered during the implementation of the PEQF. Research limitations/implications The ability to generalise findings across different groups is limited as other influences may impact on a learner’s confidence and employability. However, the implications for the PEQF curriculum are worthy of consideration. Practical implications As the police service moves towards standardised higher educational provision and evolution of policing as a profession, lessons can be learnt from the CKP with regards to the future employability of graduates. Originality/value Enhancing the employability evidence base, focussing on policing, the research identified aspects which may impact on graduates completing a degree mapped to the PEQF. The research is therefore of value to higher education and the professional body for policing.

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