Does Foreign Firm Do Worse in U.S.? From Audit Delay Evidence

• In Event: Research in Auditing

Abstract

This paper studies country-specific characteristics, including legal enforcement environment, capital market nature, and the accounting standard adopted, that might possibly affect the occurrence of audit delay. Audit delay is defined by various studies as the number of days between a company’s fiscal year-end and the date its auditor signs off auditor’s report. The research involves 455 US-listed firms, including both domestic and foreign firms, which had at least one audit delay during the period from 2002 to 2014. The result shows that, although firms from developed capital markets generally suffer more audit delays, a country’s legal enforcement environment seems to be a more influential factor. Besides, firms from US-GAAP adopting countries have more audit delay than those from IFRS adopting countries.

Authors

• Jidong Zhang, University of Wisconsin Eau Claire

• Jing Han, Winona State University