Corporate Reputation and the Timeliness of External Audit and Earnings Announcement

30 Pages Posted: 6 Oct 2020

See all articles by Eunice Khoo

Eunice Khoo

Australian National University (ANU)

Youngdeok Lim

UNSW Business School

Gary S. Monroe

affiliation not provided to SSRN

Date Written: November 1, 2020

Abstract

We examine the association between corporate reputation and the timeliness of external audit and earnings announcement. Changes in financial reporting regulation have resulted in longer audit delay, leading to an increase in the number of firms that announce earnings prior to audit completion, both of which have implications for the quality and usefulness of financial information. We find that corporate reputation is negatively associated with audit report lag, earnings announcement lag, and the likelihood of firms announcing earnings after audit completion. Our results are robust to a variety of sensitivity tests. We document important benefits in the form of timelier audits and earnings announcements derived from developing and maintaining a good corporate reputation. Our findings have implications for client firms and auditors, particularly given the challenges faced by auditors in terms of more onerous audit requirements and shorter filing deadlines, as well as demands for timelier information faced by firms.

Keywords: Corporate Reputation, Earnings Announcement Timeliness, External Audit Timeliness, Time Constraint

Suggested Citation

Khoo, Eunice and Lim, Youngdeok and Monroe, Gary S., Corporate Reputation and the Timeliness of External Audit and Earnings Announcement (November 1, 2020). International Journal of Auditing, Vol. 24, Issue 3, pp. 366-395, 2020, Available at SSRN: https://ssrn.com/abstract=3704853 or http://dx.doi.org/10.1111/ijau.12202

Eunice Khoo (Contact Author)

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Youngdeok Lim

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Gary S. Monroe

affiliation not provided to SSRN

No Address Available

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