School Districts and External Audit Quality: The Effects of Auditor Entrenchment

• In Event: State and Local Government Pensions and Audit Quality

Abstract

In this study we examine predictors of audit reporting lag in school districts in New York State (NYS). Using survey data collected from school districts on Long Island, we also explore the relationship between audit report lag and governance characteristics of boards of education and audit committees.
Together, school boards, school-district management, board-designated committees, and mandated-audit committees, have responsibility to ensure the quality and timeliness of the district’s financial reporting. Audit report lag, typically defined as the time from the entity’s year end until the auditor’s report date, affects the timeliness of accounting information (Carslaw et al. 2007) This delay affects stakeholders’ confidence in the financial reporting process and the reports themselves have less relevance in light of the delay. Since, audit lag is a function of both client and auditor specific characteristics; we also examine the effect of auditor concentration in the Long Island, NY school district audit market and the effect this concentration has on audit report lag.

Authors

• Nina T Dorata, St John's University

• Cynthia R. Phillips, St John's University

• Joseph Trainor, St John's University