CEO Network Connections and Audit Timeliness

53 Pages Posted: 19 Feb 2021

See all articles by Sharif Islam

Sharif Islam

Southern Illinois University at Carbondale

William R. McCumber

College of Business, Louisiana Tech University

Nusrat Farah

Southern Illinois University at Carbondale

Huan Qiu

Millsaps College

Date Written: October 30, 2020

Abstract

The study examines the association between CEO’s network connections and audit timeliness. Based on extant research, we hypothesize that well-connected CEOs are associated with reduced audit lag. Using a sample of over 2000 firms for the period 2004 to 2017, we find that, ceteris paribus, firms with well-connected CEOs are associated with reduced audit lag. We also find firms led by more connected CEOs have better financial reporting quality and pay higher auditing fees for increased audit efforts. In addition, well-connected CEO firms release 10-K reports in a timelier manner. These findings suggest that improved information environment around well-connected CEOs lead to the timely dissemination of high-quality financial information to market participants.

Keywords: CEO Network Connections, Audit Lag, Audit Fees.

JEL Classification: D85, M42.

Suggested Citation

Islam, Md. Shariful and McCumber, William R. and Farah, Nusrat and Qiu, Huan, CEO Network Connections and Audit Timeliness (October 30, 2020). Available at SSRN: https://ssrn.com/abstract=3721763 or http://dx.doi.org/10.2139/ssrn.3721763

Md. Shariful Islam (Contact Author)

Southern Illinois University at Carbondale ( email )

Rehn Hall - Mail Code 4626
Carbondale, IL Illinois 62901-4515
United States

William R. McCumber

College of Business, Louisiana Tech University ( email )

COBB 209
P.O. Box 10318
Ruston, LA 71272
United States
318-257-2389 (Phone)
318-257-4253 (Fax)

Nusrat Farah

Southern Illinois University at Carbondale ( email )

Rehn Hall - Mail Code 4626
Carbondale, IL Illinois 62901-4515
United States

Huan Qiu

Millsaps College ( email )

Jackson, MS 39210
United States

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