How has the Change in the Way Auditors Determine the Audit Report Date Changed the Meaning of the Audit Report Date? Implications for Academic Research

2021 ◽  
Author(s):  
Steven M. Glover ◽  
James C Hansen ◽  
Timothy A. Seidel
Keyword(s):  
Academic Research ◽  
Financial Statements ◽  
Standard Setting ◽  
Turn Of The Century ◽  
Audit Report ◽  
Filing Date ◽  
Audit Opinion ◽  
The Public ◽  
Audit Efficiency ◽  
Regulatory Actions

Archival research in accounting often relies on the audit report date to capture the constructs of audit efficiency, audit timeliness, audit effort, or audit completion. Auditors' view of what constitutes sufficient appropriate evidence to support the audit opinion, and consequently the date of the audit report, previously coincided with the substantial completion of audit fieldwork, which would be days or weeks before a 10-K filing. However, this view has shifted to coincide with the timing of the public issuance of clients' financial statements (i.e., the 10-K filing date) following several regulatory actions, audit practice changes, and professional standard setting changes occurring since the turn of the century. In this study, we present evidence of this shift in auditor perspective and discuss implications for academic research and standard setting.

Does Recent Academic Research Support Changes to Audit Reporting Standards?

2016 ◽  
Vol 30 (2) ◽  
pp. 255-275 ◽  
Author(s):  
Jean Bédard ◽  
Paul Coram ◽  
Reza Espahbodi ◽  
Theodore J. Mock
Keyword(s):  
Financial Reporting ◽  
Academic Research ◽  
Financial Statements ◽  
Future Research ◽  
Research Support ◽  
The Public ◽  
Market Participants ◽  
Information Gap ◽  
Public Company ◽  
Reporting Process

SYNOPSIS The Public Company Accounting Oversight Board (PCAOB), the International Auditing and Assurance Standards Board (IAASB), and the U.K. Financial Reporting Council (FRC) have proposed or approved standards that significantly change the independent auditor's report. These initiatives require the auditor to make additional disclosures intended to close the information gap; that is, the gap between the information users desire and the information available through the audited financial statements, other corporate disclosures, and the auditor's report. They are also intended to improve the relevancy of the auditor's report. We augment prior academic research by providing standard setters with an updated synthesis of relevant research. More importantly, we provide an assessment of whether the changes are likely to close the information gap, which is important to financial market participants and other stakeholders in the audit reporting process. Also, we identify areas where there seems to be a lack of sufficient research. These results are of interest to all stakeholders in the audit reporting process, as the changes to the auditor's report are fundamental. Additionally, our summaries of research on the auditor's report highlight where there is limited research or inconsistent results, which will help academics identify important opportunities for future research.

Additional Evidence on Audit Report Lag

2001 ◽  
Vol 20 (1) ◽  
pp. 137-146 ◽  
Author(s):  
W. Robert Knechel ◽  
Jeff L. Payne
Keyword(s):  
Earnings Quality ◽  
Financial Statements ◽  
Financial Statement ◽  
Fiscal Year ◽  
Sources Of Information ◽  
Audit Report ◽  
The Public ◽  
Time Period ◽  
Audit Team ◽  
Available Information

The process for providing accounting information to the public has not changed much in the last century even though the extent of disclosure has increased signifi-cantly. Sundem et al. (1996) suggest that the primary benefit of audited financial statements may not be decision usefulness but the discipline imposed by timely confirmation of previously available information. In general, the value of information from the audited financial statement will decline as the audit report lag (the time period between a company's fiscal year end and the date of the audit report) increases since competitively oriented users may obtain substitute sources of information. Furthermore, the literature on earnings quality and earnings management suggests that unexpected reporting delays may be associated with lower quality information. The purpose of this paper is to extend our understanding about the determinants of audit report lag using a proprietary database containing 226 audit engagements from an international public accounting firm. We examine three previously uninvestigated audit firm factors that potentially influence audit report lag and are controllable by the auditor: (1) incremental audit effort (e.g., hours), (2) the resource allocation of audit team effort measured by rank (partner, manager, or staff), and (3) the provision of nonaudit services (MAS and tax). The results indicate that incremental audit effort, the presence of contentious tax issues, and the use of less experienced audit staff are positively correlated with audit report lag. Further, audit report lag is decreased by the potential synergistic relationship between MAS and audit services.

scholarly journals Financial statements disclosure on Indonesian local government websites

2019 ◽  
Vol 4 (1) ◽  
pp. 112-128
Author(s):  
Wahyudin Nor ◽  
Muhammad Hudaya ◽  
Rifqi Novriyandana
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Financial Statements ◽  
Education Level ◽  
Content Type ◽  
Audit Opinion ◽  
Level Of Education ◽  
The Public ◽  
Government Websites

Purpose The purpose of this paper is to examine the extent to which audit opinion, audit findings, follow-up audit recommendations, level of education, level of welfare and heads of local governments’ commitment influence the disclosure of financial statements on the official website of local government. Design/methodology/approach The data of this research comprise 68 financial statements during the period 2015–2016 collected from 34 local governments across Indonesia by employing the census method. The data then are analyzed using logistic regression. Findings The results of this study show that audit opinion has a positive significant influence on the disclosure of financial statements on local government websites in Indonesia, while the audit findings, follow-up audit recommendations, level of education, level of welfare and heads of local governments’ commitment have no significant influences on the disclosure of financial statements local governments’ websites across Indonesia. Originality/value The study contributes to the public sector accounting research by enhancing our understanding to the disclosure of financial statements on local government websites.

Response of a Subgroup of the PCAOB's Investor Advisory Group to the PCAOB's Concept Release Concerning Reports on Audited Financial Statements and Related Amendments to PCAOB Standards

2011 ◽  
Vol 5 (2) ◽  
pp. C21-C50 ◽  
Author(s):  
Kelvin Blake ◽  
Joseph V. Carcello ◽  
Norman J. Harrison ◽  
Michael J. Head ◽  
Barbara E. Roper ◽  
...  
Keyword(s):  
Financial Statements ◽  
Capital Allocation ◽  
Financial Statement ◽  
Advisory Group ◽  
Audit Report ◽  
Audit Risk ◽  
The Public ◽  
Public Company ◽  
Risk Areas

SUMMARY Recently, the Public Company Accounting Oversight Board (PCAOB) released a concept release concerning possible revisions to PCAOB standards related to reports on audited financial statements and related amendments to PCAOB standards. The comment letter below, written by a subgroup of the PCAOB's Investor Advisory Group, was recently submitted to the PCAOB in response to the Board's concept release. The subgroup believes that the four most important changes to the audit report would require the auditor to: (1) discuss the auditor's assessment of the estimates and judgments made by management in preparing the financial statements and how the auditor arrived at that assessment, (2) disclose areas of high financial statement and audit risk and how the auditor addressed these risk areas, (3) discuss unusual transactions, restatements, and other significant changes in the financial statements (including the notes), and (4) discuss the quality, not just the acceptability, of the issuer's accounting practices and policies. They further assert that the disclosure of this information will improve investors' ability to make informed buy/sell decisions, which should result in higher returns to investors and improved capital allocation within society.

scholarly journals Signing Auditor-Specific Characteristics And Audit Report Lag: A Research From Turkey

2018 ◽  
Vol 34 (2) ◽  
pp. 277-294 ◽  
Author(s):  
Murat Ocak ◽  
Evrim Altuk Ozden
Keyword(s):  
Educational Level ◽  
Financial Statements ◽  
Education Level ◽  
Audit Report ◽  
Firm Age ◽  
Audit Opinion ◽  
Gender And Education ◽  
Big 4 ◽  
Audit Firms ◽  
Positive Effect

The purpose of this paper is to examine the effect of signing auditor-specific characteristics on the audit report lag using 968 firm-year observations from Borsa İstanbul in the period 2008-2013. The main findings indicate that the gender and education level of signing auditor have a positive effect on audit report lag. Also big4 audit firms in Turkey encourage auditees to present financial statements timely and they play a substantial role in the reporting. Audit opinion directly affects audit report lag. Firm performance and firm age inversely affect audit report lag. Moreover, big 4’s female signing auditors lead to more audit delay. The higher educational level of signing auditors leads to more audit report lag. Signing auditors who hold master’s or Ph.D. degrees and also female signing auditors are associated with more audit report lag in firms audited by big4 and non-big4 firms.

The determinants of audit report lag: a meta-analysis

2019 ◽  
Vol 34 (1) ◽  
pp. 44-75 ◽  
Author(s):  
Giselle Durand
Keyword(s):  
Meta Analysis ◽  
Fiscal Year ◽  
Future Research ◽  
Audit Report ◽  
Key Factors ◽  
Content Type ◽  
Audit Opinion ◽  
Earnings Information ◽  
Financial Condition ◽  
Audit Efficiency

Purpose The purpose of this paper is to further the understanding of the determinants of audit report lag, which is the number of days from a company’s fiscal year-end to the date of its auditor’s report, by synthesizing extant literature. Audit report lag has been a variable of interest in many studies due to its use as a proxy for the occurrence of auditor-client management negotiations and audit efficiency and because long audit report lags delay the release of earnings information to the market. Design/methodology/approach The author uses meta-analysis to examine commonly identified predictors of audit report lag to determine if the prior research provides a consistent portrayal of audit report lag drivers. Findings The author finds that a number of variables relating to client profitability and financial condition, client complexity and audit opinion modifications increase audit report lag. In addition, audit report lag decreases with client size, when clients have positive earnings news to report and when the auditor has long tenure and provides non-audit services. Several variables, such as those relating to corporate governance and various auditor characteristics, have been little explored and would benefit from future research. Originality/value These results will be useful to researchers when selecting control variables for future audit report lag studies and provide insights into the key factors that contribute to the delay in audit reporting.

Another Piece of the “Expectations Gap”: What Do Investors Know About Auditor Involvement with Information in the Annual Report?

2012 ◽  
Vol 6 (1) ◽  
pp. A17-A30 ◽  
Author(s):  
Jean C. Bedard ◽  
Steve G. Sutton ◽  
Vicky Arnold ◽  
Jillian R. Phillips
Keyword(s):  
Annual Report ◽  
Financial Statements ◽  
Public Companies ◽  
Audit Opinion ◽  
Nonprofessional Investors ◽  
The Public ◽  
Expectations Gap ◽  
Corporate Websites ◽  
Unmet Demand

SUMMARY The “expectations gap” refers to differences in views of auditors and users regarding the extent of assurance obtained from auditing procedures. One aspect of the expectations gap considered by prior research is whether users differentiate the level of assurance provided by different audit procedures. We extend that research by studying whether investors understand that information outside of the financial statements, in the 10-K as well as on corporate websites, is not audited. This research is important, as the Public Companies Accounting Oversight Board currently is considering proposals aimed at clarifying or expanding the auditor's responsibility for that information. We surveyed professional and nonprofessional investors, and find that professionals are more likely than nonprofessionals to correctly identify which 10-K components are audited. However, many investors in both groups believe that information outside of the financial statements is audited when in fact it is not. We also find some evidence that investors use certain information categories more often when they believe that the information is audited. Also, for both investor groups, responses concerning whether currently unaudited information categories should be audited suggest an unmet demand for greater assurance on information outside of the financial statements. Our results support proposals for greater clarity in the audit opinion concerning the nature of procedures performed on information outside of the financial statements. Further, our findings imply that additional assurance on that information might be considered useful.

scholarly journals Pengaruh Ukuran Pemerintah Daerah, Opini Audit, Dan Leverage Terhadap Audit Delay

2019 ◽  
Vol 1 (3) ◽  
pp. 1168-1183
Author(s):  
Maidelfian Putra Bakar ◽  
Fefri Indra Arza
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Financial Statements ◽  
Government Size ◽  
Timely Manner ◽  
Financial Reports ◽  
Audit Opinion ◽  
The Public ◽  
Negative Effect ◽  
Independent Variable

Local governments are obliged to ensure that their financial statements are presented in a timely manner as they are a form of accountability to the public. These financial reports can be used by the public to evaluate the capabilities of local governments in managing their resources effectively and efficiently. Financial statements that were not provided on time may cause those report loses their capacity to influence decisions. The study was categorized into causative research. Where this study aims to see how far the independent variables affect the dependent variable. This research tries to explain the influence of local government size (X1), audit opinion (X2) and leverage (X3) as independent variable to audit delay (Y) as dependent variable. The population observed in this study is from regencies and cities in West Sumatera in 2015 and 2017. The result of this study shows that the audit opinion variable cause significant negative effect on audit delay. The local government size and the leverage variable doesn't affect audit delay. This study also shows that local government size, audit opinion, and leverage together influence audit delay

scholarly journals ANALISIS PENGUNGKAPAN LAPORAN KEUANGAN PEMERINTAH KOTA MANADO TAHUN 2015

2018 ◽  
Vol 13 (02) ◽  
Author(s):  
Andi Lombar Dini ◽  
Harijanto Sabijono ◽  
Natalia Gerungai
Keyword(s):  
Municipal Government ◽  
Financial Statements ◽  
City Government ◽  
Audit Opinion ◽  
Financial Report ◽  
The Public ◽  
Government Accounting ◽  
North Sulawesi ◽  
State Audit ◽  
The Government

The government has the power to collect people's income and use it to finance these activities in order to provide services to the public. Governments should be responsible for such activities in a transparent manner, in accountability to make a financial report where the financial statements will be assessed by the BPK to be given an audit opinion. On Wednesday 22 June 2016, the manado city government represented by the mayor of Manado received LHP (Laporan Hasil Pemeriksaan) from the State Audit Agency Republic of Indonesia (BPK-RI) representative of North Sulawesi on the financial statements of Manado city government in 2015. However, from several studies, there are still some reports that have not fully disclosed the information that should be disclosed in the financial statements. This research method using qualitative method. The results of this study found the disclosure level of financial statements of Manado city government in 2015 was 52.94%, it explains that the financial statements of Manado municipal government have not fulfilled all the disclosure items in PP N0.71 Year 2010 on Government Accounting Standards.Keywords : Disclosure, Opinion, Public

scholarly journals A study on audit report timeliness: The Macedonian Stock Exchange

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Dusica Stevcevska Srbinoska ◽  
Igor Srbinoski
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Financial Statements ◽  
Cash Flows ◽  
Audit Report ◽  
Audit Opinion ◽  
Timely Fashion ◽  
Nonfinancial Firms ◽  
The Relationship ◽  
Firm Attributes

Abstract Financial statements reflect important information about the entity's financial position, operating performance, and cash flows and must be made available in a timely fashion to all interested factions to stimulate opportune business judgments. Ergo, this paper examines the association of the audited annual report delay with eight entity and audit firm attributes. The sample includes 396 observations of 99 nonfinancial firms listed on the Macedonian Stock Exchange (MSE) for the period 2014–2017. The regression results designate a statistically significant relationship between the audit opinion, company liquidity, size, and industry with the audit opinion lag. Moreover, the publication period ranges from 43 days to 374 days suggesting that timeliness may be a significant concern for Macedonian entities regarding financial reporting policy. This is the first study to thoroughly assess the relationship between entity, auditor characteristics, and audit report timeliness on the developing Macedonian market.

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