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
Date Written: August 15, 2023
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: Suggested Citation