The Impact of the COVID-19 Pandemic on Quality of Financial Reports

Abstract

The Corona Virus Disease pandemic has significant adverse effects on the economy, health, and society that have hampered global economic growth. Taiwan is one of the countries impacted by this pandemic. The pandemic had an enormous influence on the world economy, making the role of financial report quality an even more critical issue. This study aims to examine and evaluate the impact of the COVID-19 pandemic on the quality of financial reports. Additionally, it intends to examine and evaluate the differences between the impact of audit opinion and audit quality on the quality of financial reports before and after the COVID-19 pandemic. This study adopts secondary data, i.e., annual financial reports and audit quality data of public listing firms on the Taiwan Stock Exchange (TSE). Furthermore, this study selected data from 2016 to 2021. This study proves that the COVID-19 pandemic affects the quality of financial reports. Furthermore, this study suggests that the COVID-19 pandemic strengthens the negative impacts of audit opinion on the quality of financial reports using accrual earnings management proxies. However, it also shows that the audit quality did not impact the quality of financial reports proxied by accrual and real earnings management at the beginning of the COVID-19 outbreak. JEL classification numbers: G32, M41, O06, Q56. Keywords: The Quality of Financial Reports, COVID-19 Pandemic, Audit Opinion, Audit Quality.

Pengaruh Penghindaran Pajak Dan Tata Kelola Perusahaan Terhadap Manajemen Laba Dengan Tanggung Jawab Sosial Sebagai Variabel Moderasi

“…Ruang lingkup bisnis mengalami perubahan terbesar selama 3 tahun terakhir akibat pandemi Covid-19 (Chen et al, 2023). Pandemi Covid-19 menyebabkan terbatasnya aktivitas perdagangan, sehingga terjadi penurunan kegiatan perekonomian dalam hal penawaran dan permintaan (Flores et al, 2023).…”

“…Adanya pembatasan secara menyeluruh guna mengatasi dampak pandemi Covid-19 menyebabkan terhambatnya perekonomian, sehingga banyak perusahaan mengkhawatirkan kinerja keuangannya (Altig et al, 2020;Chen et al, 2023). Upaya pembatasan seperti munculnya kebijakan moneter menyebabkan munculnya inkonsistensi oleh investor jangka panjang maupun jangka pendek (Gormsen & Koijen, 2020).…”