The Effectiveness and Efficiency of Auditors’ Remote Work During COVID-19

Auditing: A Journal of Practice and Theory, Forthcoming

47 Pages Posted: 2 Feb 2022 Last revised: 30 Sep 2023

See all articles by Landi Morris

Landi Morris

Northern Arizona University

Rani Hoitash

Bentley University - Department of Accountancy

Udi Hoitash

Northeastern University - Accounting Group

Date Written: August 15, 2023

Abstract

The COVID-19 pandemic introduced unprecedented challenges to the audits of public companies. Audit firms, in response, dedicated significant resources to maintaining high quality audit procedures. We leverage a difference-in-differences design to examine the effects of the pandemic on audit outcomes. Despite audit firm efforts, we find evidence of a decline in audit quality in the initial months of the COVID-19 pandemic. Further, in the early days of the pandemic, the SEC made available a unique one-time 45-day extension to file the audited annual report. In this time period we observe a significant increase in the likelihood of delayed filings, including those attributed to the auditors’ work. Our study informs regulators and audit firms about the broad impact of an unprecedented stressor on the audit process and on the efficacy of remote work.

Keywords: COVID-19, Coronavirus, late filings, discretionary accruals, going concern, audit quality, remote work, pandemic

JEL Classification: M4, M41, M42

Suggested Citation

Morris, Landi and Hoitash, Rani and Hoitash, Udi, The Effectiveness and Efficiency of Auditors’ Remote Work During COVID-19 (August 15, 2023). Auditing: A Journal of Practice and Theory, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4023505 or http://dx.doi.org/10.2139/ssrn.4023505

Landi Morris (Contact Author)

Northern Arizona University ( email )

PO Box 15066
Flagstaff, AZ 86011
United States

Rani Hoitash

Bentley University - Department of Accountancy ( email )

175 Forest Street
Waltham, MA 02452-4705
United States

HOME PAGE: http://www.xbrlresearch.com

Udi Hoitash

Northeastern University - Accounting Group ( email )

360 Huntington Ave.
Boston, MA 02115
United States
671-373-5839 (Phone)

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