Audit Oversight: Quality Control Review of PricewaterhouseCoopers, LLP and the Defense Contract Audit Agency Office of Management and Budget Circular A-133 Audit Report of the Institute for Defense Analyses, Fiscal Year Ended September 28, 2001

Time period in completing the audit work until the date of publishing audit report is called audit report lag. BAPEPAM requires each of going-public companies to publish their annual reports not later than three months after the fiscal year ends. The aim of this research was to determine the effect of profitability, solvency, company size, audit opinion, and size of public accounting firm on audit report lag at mining companies listed on Indonesia Stock Exchange during the period of 2013-2017. As many as 12 samples were obtained through purposive sampling technique. The data analysis technique used was the multiple regression analysis. The results showed that the profitability and company size negatively affected the audit report lag, while the other variables, such as solvency, audit opinion, and size of public accounting firm, had no significant effect on the audit report. The result of simultaneous test showed that all independent variables influenced audit report lag with 32.8% of determination coefficient.

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Additional Evidence on Audit Report Lag

Auditing A Journal of Practice & Theory ◽

10.2308/aud.2001.20.1.137 ◽

2001 ◽

Vol 20 (1) ◽

pp. 137-146 ◽

Cited By ~ 175

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.

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A review of the empirical determinants of audit delay

Corporate Ownership and Control ◽

10.22495/cocv9i2c5art5 ◽

2012 ◽

Vol 9 (2) ◽

pp. 511-514 ◽

Cited By ~ 1

Author(s):

Salem Eghlaiow ◽

Guneratne Wickremasinghe ◽

Stella Sofocleous

Keyword(s):

Financial Reporting ◽

Accounting Information ◽

Fiscal Year ◽

Audit Report ◽

Financial Reports ◽

Significant Characteristic

Timeliness in financial reporting is considered to be a significant characteristic of accounting information. Since audit delay has been found to be the single most important factor in determining the timing of financial reports releases, this concept paper discuss the determinants of “audit delay”, the number of calendar days from fiscal year-end to the audit report date. The first section sheds some light on the significance of studying the determinants of audit delay. Next, it reviews the literature on audit report delay (ARL) and its determinants.

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Hiring Auditors with a Part II Quality Control Report: An Opportunity for Increased Earnings Management or Lower Audit Fees?

Journal of Forensic Accounting Research ◽

10.2308/jfar-19-020 ◽

2020 ◽

Vol 5 (1) ◽

pp. 73-93

Author(s):

Jared Eutsler ◽

D. Kip Holderness ◽

Megan M. Jones

Keyword(s):

Quality Control ◽

Audit Quality ◽

Audit Fees ◽

Data Availability ◽

Fiscal Year ◽

The Public ◽

Audit Firms ◽

Public Company ◽

General Demand ◽

Systemic Quality

ABSTRACT The Public Company Accounting Oversight Board's (PCAOB) Part II inspection reports, which disclose systemic quality control issues that auditors fail to remediate, signal poor audit quality for triennially inspected audit firms. Auditors that receive a Part II inspection report typically experience a decrease in clients, which demonstrates a general demand for audit quality. However, some companies hire auditors that receive Part II inspection reports. We examine potential reasons for hiring these audit firms. We find that relative to companies that switch to auditors without Part II reports, companies that switch to auditors with Part II reports have higher discretionary accruals in the first fiscal year after the switch, which indicates lower audit quality and a heightened risk for future fraud. We find no difference in audit fees. Our results suggest that PCAOB Part II inspection reports may signal low-quality auditors to companies that desire low-quality audits. Data Availability: Data are available from the public sources cited in the text.

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Determinants of Audit Report Lag of Financial Statements in Banking Sector

Matrik Jurnal Manajemen Strategi Bisnis dan Kewirausahaan ◽

10.24843/matrik:jmbk.2019.v13.i02.p02 ◽

2019 ◽

pp. 142

Author(s):

Sigit Handoyo ◽

Erza Diandra Maulana

Keyword(s):

Sampling Method ◽

Banking Sector ◽

Stock Exchange ◽

Financial Statements ◽

Fiscal Year ◽

Audit Report ◽

Financial Service Authority ◽

Firm Reputation ◽

Financial Reports ◽

Auditor Switching

Audit Report Lag (ARL) is the time length of the auditor completing their activities on the client is measured from the end of the fiscal year until the date of audit report was signed. Research related to ARL has been widely carried out in some countries, considering the importance of this issue. This study analyzed the factors that affect ARL on the Conventional Bank Companies listed in the Indonesia Stock Exchange. The sample consisted of 84 companies listed in Indonesia Stock Exchange (IDX) which submitted financial reports to OJK (the Financial Service Authority) in the period of 2013-2015. The data used in this research was selected by using purposive sampling method and analysis used multiple linear regression. Based on the analytical results, Profitability, Auditor Opinion, and Firm Reputation had negative significant effect toward ARL. Then Auditor Switching, Complexity, and Board of Size of Director had positive significant effect toward ARL.

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Audit-related attributes, regulatory reforms and timely disclosure

Journal of Financial Reporting and Accounting ◽

10.1108/jfra-08-2015-0077 ◽

2017 ◽

Vol 15 (2) ◽

pp. 158-179 ◽

Cited By ~ 1

Author(s):

Khaled Samaha ◽

Hichem Khlif

Keyword(s):

Audit Committee ◽

Stock Exchange ◽

Emerging Market ◽

Chief Executive ◽

Policy Implications ◽

Fiscal Year ◽

Audit Report ◽

Content Type ◽

The Impact ◽

Regulatory Reforms

Purpose This paper aims to examine the impact of audit-related attributes and regulatory reforms on timely disclosure as proxied by audit report lag (ARL) in an emerging market setting, namely, Egypt. Design/methodology/approach The paper used the balanced panel data of 372 firm-years observations of the most actively traded companies on the Egyptian Stock Exchange over the period from 2007 to 2010. The study measures the dependent variable of ARL as the number of days between the client’s fiscal year-end and the audit report. Findings Multivariate analysis indicates that audit committee activity (proxy for regulatory reforms) and external auditor type (proxy for audit-related attributes) contribute significantly to the reduction of ARL and increase disclosure timeliness. Furthermore, the paper found that ARL witnessed a slight decrease following the adoption of the new Egyptian Standards on Auditing (ESA). Finally, the paper’s findings show that industry types moderate the relationship between ARL and several audit-related variables and corporate governance attributes. Practical implications The results may have policy implications for both regulators and investors. For instance, policymakers in Egypt can enact new rules to reduce the Chief Executive Officer duality and establish the minimum required number of audit committee meetings to improve transparency level and, thus, increase disclosure timeliness. Besides, if future regulations aiming to increase disclosure timeliness are intended by Egyptian regulators, this paper’s findings suggest that this may have implications for the audit market because the Big Four audit firms will be more able to meet shorter audit delays. Originality/value The empirical evidence provided in this study further enhances the understanding of timely disclosure in Egypt which represents one of the leading emerging markets in the Middle East and North Africa region.

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