Audit opinion improvement and the timing of disclosure |
Abstract:
Companies have been found to report positive information more quickly than they report negative information i.e., good news early, bad news late). This paper investigates the potential impact of audit opinion change on the timeliness of financial disclosures, with improvements in audit opinion considered to be good news.” We take both the direction and the magnitude of audit opinion change into consideration, with magnitude measuring how far the opinion is from an unqualified opinion (i.e., an unqualified opinion with explanator paragraph is closer to an unqualified opinion than a qualified opinion is). We find that firms experiencing an improvement in their audit opinions disclose their financial results earlier, while those with audit opinion deteriorations report their financial results later, and that these effects were related to the magnitude of the opinion change. What's more, there is an asymmetric response to good audit opinion news vs. bad audit opinion news, with bad audit opinion news having a larger effect on earnings timeliness than the effect on earnings timeliness of good audit opinion news. Overall, our results support the “good news early, bad news late” notion. Finally, we also find that overall earnings timeliness has improved in China since the enactment of new reporting regulations in 2006. |
| Keywords: |
Audit opinion Change in audit opinion Unexpected earnings Timeliness |
| Author(s): |
Charles P. Cullinan , Fangjun Wang , Bei Yang, Junrui Zhang |
| Source: |
Advances in Accounting, incorporating Advances in International Accounting 28 (2012) 333–343 |
| Subject: |
حسابداری و حسابرسی |
| Category: |
مقاله مجله |
| Release Date: |
2012 |
| No of Pages: |
11 |
| Price(Tomans): |
0 |
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بر اساس شرایط و ضوابط ارسال مقاله در سایت مدیر، این مطلب توسط یکی از نویسندگان ارسال گردیده است. در صورت مشاهده هرگونه تخلف، با تکمیل فرم گزارش تخلف حقوق مؤلفین مراتب را جهت پیگیری اطلاع دهید.
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