Audit Team's Expertise, Audit Report Lags and Audit Quality

Abstract

Abstract: Based on the data of Chinese A-share listed non-financial companies from 2007 to 2014, we investigate the relationship between audit team’s expertise and audit report lags. After proving the positive effect of audit team’s expertise on audit quality, we then analyze whether this positive effect is influenced by audit report lags. We find an abnormal phenomenon that audit report lags will be longer when it is audited by audit team that has expertise, and this phenomenon will impair audit report timeliness. Further analysis indicates that audit quality will be better when audit report is audited by an audit team that has expertise. We then find that audit report lags can positively impact the relationship between auditor expertise and audit quality. These results indicate that audit team will sacrifice audit report timeliness to further promote audit quality when they has expertise. We also find that these results are consistantwhen we downward the perspective to sign-auditor’s expertise. Our findings enrich the research on influence factors of audit report lags and provide empirical evidence.

Key words: audit team, expertise, audit report lags, annual financial statement, audit quality

Yu Yumiao, Song Zilong, Sun Di. Audit Team's Expertise, Audit Report Lags and Audit Quality[J]. Management Review, 2021, 33(4): 248-258.

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