The Impact of Large Accelerated Filers’ Requirements on Audit Report Lags

• In Event: Continental Breakfast and Research & Education Forum
  In Roundtable Session: Table 8: Auditing Effects on Reporting Delays/Errors

Abstract

This study examines audit report lags and audit report deadline margins for a longitudinal sample of 1,559 firms over the period 2007-2010. It specifically examines whether audits of large accelerated filers are completed within a shorter period compared with regular accelerated filers due to the introduction of new deadline filing requirements by the SEC. The study also examines whether large accelerated filers has shorter audit report deadline margins. Results indicate that audits of large accelerated filers have shorter audit report lags compared with regular accelerated filers. Also, large accelerated filers have shorter audit report deadline margins compared with regular accelerated filers. These results suggest that even though large accelerated filers’ audits are more complex by nature, auditors of these firms are under more pressure to complete their audits and issue their clients’ audit reports on time. However, they are forced to "cut it closer" to the filing deadline than regular accelerated filers.

Author

• Magdy S Farag, California State Polytechnic University, Pomona