IDEAS home Printed from https://ideas.repec.org/a/eee/jiaata/v20y2011i1p32-44.html
   My bibliography  Save this article

Audit firm industry specialization and the audit report lag

Author

Listed:
  • Habib, Ahsan
  • Bhuiyan, Md. Borhan Uddin

Abstract

This paper contributes to the audit report lag (ARL) literature by documenting the association between audit firm industry specialization and the ARL. ARL is one of the few externally observable audit output variables that allows outsiders to gauge audit efficiency, because it relates to the timeliness of both audit and earnings information. Although a sizable volume of literature exists on the determinants of the ARL in different countries, the effect of audit firm industry specialization on the ARL has not been investigated. Industry-specialist auditors are able to develop industry-specific knowledge and expertise and to familiarize themselves quickly with the clients’ business operations and, therefore, are likely to complete the audit sooner than their non-specialist counterparts. Using regression analyses with two different definitions of industry specialization, and controlling for known determinants of ARL, we demonstrate that the ARL is shorter for firms audited by industry specialist auditors. Our findings also reveal that the adoption of International Financial Reporting Standards (IFRS) has increased the ARL for all auditors except for industry specialist auditors.

Suggested Citation

  • Habib, Ahsan & Bhuiyan, Md. Borhan Uddin, 2011. "Audit firm industry specialization and the audit report lag," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 20(1), pages 32-44.
  • Handle: RePEc:eee:jiaata:v:20:y:2011:i:1:p:32-44
    DOI: 10.1016/j.intaccaudtax.2010.12.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1061951810000339
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Choi, Sung K. & Jeter, Debra C., 1992. "The effects of qualified audit opinions on earnings response coefficients," Journal of Accounting and Economics, Elsevier, vol. 15(2-3), pages 229-247, August.
    2. repec:bla:joares:v:37:y:1999:i:1:p:191-208 is not listed on IDEAS
    3. Vincent E. Owhoso & William F. Messier, Jr. & John G. Lynch, Jr., 2002. "Error Detection by Industry‐Specialized Teams during Sequential Audit Review," Journal of Accounting Research, Wiley Blackwell, vol. 40(3), pages 883-900, June.
    4. Dopuch, Nicholas & Holthausen, Robert W. & Leftwich, Richard W., 1986. "Abnormal stock returns associated with media disclosures of `subject to' qualified audit opinions," Journal of Accounting and Economics, Elsevier, vol. 8(2), pages 93-117, June.
    5. Watts, Ross L & Zimmerman, Jerold L, 1983. "Agency Problems, Auditing, and the Theory of the Firm: Some Evidence," Journal of Law and Economics, University of Chicago Press, vol. 26(3), pages 613-633, October.
    6. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 125-132.
    7. repec:bla:joares:v:13:y:1975:i:2:p:204-219 is not listed on IDEAS
    8. repec:bla:joares:v:25:y:1987:i:2:p:275-292 is not listed on IDEAS
    9. repec:bla:joares:v:22:y:1984:i::p:59-82 is not listed on IDEAS
    10. Soltani, Bahram, 2002. "Timeliness of corporate and audit reports: Some empirical evidence in the French context," The International Journal of Accounting, Elsevier, vol. 37(2), pages 215-246.
    11. Gul, Ferdinand A. & Fung, Simon Yu Kit & Jaggi, Bikki, 2009. "Earnings quality: Some evidence on the role of auditor tenure and auditors' industry expertise," Journal of Accounting and Economics, Elsevier, vol. 47(3), pages 265-287, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:kap:jmgtgv:v:21:y:2017:i:2:d:10.1007_s10997-016-9347-3 is not listed on IDEAS
    2. repec:eee:advacc:v:30:y:2014:i:2:p:283-297 is not listed on IDEAS
    3. repec:taf:oabmxx:v:3:y:2016:i:1:p:1195680 is not listed on IDEAS
    4. repec:mth:ijafr8:v:9:y:2019:i:1:p:152-169 is not listed on IDEAS
    5. repec:spr:eurasi:v:7:y:2017:i:3:d:10.1007_s40821-016-0070-4 is not listed on IDEAS
    6. Reheul, Anne-Mie & Van Caneghem, Tom & Verbruggen, Sandra, 2011. "Auditor choice in the Belgian nonprofit sector: a behavioral perspective," Working Papers 2011/36, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    7. repec:ibn:ijefaa:v:10:y:2018:i:2:p:48-56 is not listed on IDEAS
    8. repec:ers:journl:v:volumexxi:y:2018:i:issue3:p:417-428 is not listed on IDEAS
    9. repec:bla:acctfi:v:58:y:2018:i:3:p:885-920 is not listed on IDEAS
    10. Shokrollah Khajavi & Akbar Zare, 2016. "The Effect of Audit Quality on Stock Crash Risk in Tehran Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 20-25.
    11. repec:eee:riibaf:v:42:y:2017:i:c:p:616-629 is not listed on IDEAS
    12. repec:wsi:rpbfmp:v:20:y:2017:i:01:n:s0219091517500060 is not listed on IDEAS
    13. Pei-Gi Shu & Tsung-Kang Chen & Wen-Jye Hung, 2015. "Audit duration quality and client credit risk," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 22(2), pages 137-162, June.
    14. repec:spr:jknowl:v:10:y:2019:i:1:d:10.1007_s13132-016-0444-y is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jiaata:v:20:y:2011:i:1:p:32-44. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: https://www.journals.elsevier.com/journal-of-international-accounting-auditing-and-taxation .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.