Analyst Coverage And Audit Efforts: Empirical Approach To Audit Hours

Chun, Hong Min; Rhee, Chang Seop

doi:10.19030/jabr.v31i3.9203

Cited by 7 publications

(6 citation statements)

References 13 publications

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“…The mean value of FIRST is 0.326, indicating that approximately 33% of the sample firms have first-year engaged audit firms. The descriptive statistics of other control variables are similar to prior audit hour studies in Korea [40]. Table 2 shows the correlation matrix.…”

Section: Descriptive Statisticsmentioning

confidence: 64%

“…The most influential factor determining audit effort is firm size, one of the important and fundamental firm characteristics. We therefore controlled the firm size, measuring it as a natural logarithm of total assets following prior literature [5,7,[15][16][17]20,[37][38][39][40][41]. We used control variables similar to those used in prior studies.…”

Section: Model Specificationmentioning

confidence: 99%

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The Impact of Corporate Charitable Contributions on Audit Hours

2019

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Corporate social responsibility (CSR) is a pertinent strategy to enhance consumer perception of product quality and a company’s reputation. A growing body of literature has investigated whether corporate charitable contributions play a similar role to that of corporate social responsibility. Controversy still remains over the cause and effect of corporate charitable contributions. This study’s objective was to examine whether auditors apply more effort when reviewing firms with a higher level of corporate charitable contributions. For example, if auditors perceive corporate charitable contributions as the opportunistic behavior of managers, then the auditors thoroughly review and prepare financial statements. However, if auditors assess corporate charitable contributions as one of a firm’s ethical responsibilities, then they are not likely to put in more effort when reviewing such firms. This paper aims to examine how capital market participants assess a firm’s charitable contributions. Using an extensive set of data for Korea from 2008 to 2015, we conducted a battery of robustness analyses to address various endogeneity issues using the abnormal audit hour model, propensity score matching method, and 2SLS regression. We found that corporate charitable contributions were positively associated with audit hours. It indicated that auditors applied more effort when they reviewed firms with corporate charitable contributions. The results suggest that auditors in Korea do not perceive corporate charitable contributions as a CSR activity but rather as an indication of the opportunistic behavior of managers.

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Section: Descriptive Statisticsmentioning

confidence: 64%

Section: Model Specificationmentioning

confidence: 99%

The Impact of Corporate Charitable Contributions on Audit Hours

2019

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“…Given the difficulties in collecting data, few studies analyze audit hours, although Caramanis and Lennox (2008), investigating a sample of 9,738 observations in Greece in the period 1994-2002, demonstrate how a higher number of audit team hours dedicated to auditing services reduces the probability of earnings management. Chun and Rhee (2015), analyzing a sample of South Korean companies in the period 2002-2010, explore the relationship between audit hours and financial analyst coverage. The results show a positive association between analyst coverage and the number of audit hours delivered, which suggests that analyst coverage has a significant influence on auditors, producing an increase in audit hours due to the incremental possibility of reputation damage resulting from an audit failure.…”

Section: Association Between Female Audit Partners and Audit Fees/audmentioning

confidence: 99%

Gender Diversity in Audit Partners and Audit Efforts

Tibiletti¹,

Azzali²,

Mazza³

2021

IJBM

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The research uses regression models and panel data related to audit fees, audit hours and corporate governance. The sample of listed firms yields 751 firms-years observations for the period 2010-2018. We study how gender diversity among audit partners, Chief Executive Officers, and Boards of Directors impact on audit fees and audit hours. We focus on the interaction between auditors and management. We find that female audit partners is associated with lower audit fees and audit hours. Next, we find that female audit partner significantly affects the association with the audit efforts in interaction with management, but when the audit partner is male, audit efforts are also determined by the female representation on the Board of Directors.  We contribute to literature on the effects of gender diversity in auditing and corporate governance. We also enrich the concept of audit efforts by including audit hours as well as audit fees. Finally, the research answers the call for empirical study on the effects of gender diversity in management-auditor interaction.

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“…Behn et al . (2008) find that auditors’ industry expertise exerts a significant effect on their activities, and Chun and Rhee (2015) demonstrate that analysts consider audit duration when making earnings forecasts. In addition to the above audit information, earnings reported in annual reports are used to judge analysts’ forecast accuracy, and it is reasonable to conclude that analysts also examine the audit activities that can directly affect the value of earnings in the annual report.…”

Section: Literature and Hypothesis Developmentmentioning

confidence: 99%

Do Analysts’ Cross‐year Revisions Contain Information about Audit Adjustment? Evidence from the Chinese Capital Market*

Chen

Tian

Qing-qing

2021

Asia-Pac J of Fin Stud

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This study tests the information content of changes in analysts’ earnings forecasts. Using audit adjustment data from China, this study investigates whether changes in analysts’ cross‐year forecast revisions reflect audit information. The results show that the cross‐year revision of analysts’ earnings per share forecasts is positively related to the magnitude of audit adjustment, which may be mainly due to analysts’ communication with management. Furthermore, analysts who display higher forecast frequency, who issue their last forecast closer to the day the annual report is announced, or who show better forecast performance reflect a greater amount of audit information in their cross‐year forecast revisions.

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Analyst Coverage And Audit Efforts: Empirical Approach To Audit Hours

Abstract: ABSTRACT

Cited by 7 publications

References 13 publications

The Impact of Corporate Charitable Contributions on Audit Hours

The Impact of Corporate Charitable Contributions on Audit Hours

Gender Diversity in Audit Partners and Audit Efforts

Do Analysts’ Cross‐year Revisions Contain Information about Audit Adjustment? Evidence from the Chinese Capital Market*

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