Author: Ahsan HabibPublisher:
ISBN:
Category :
Languages : en
Pages : 38
Book Description
This paper examines the association between abnormally long audit report lag and future stock price crash. Audit report lag is defined as the period between a company's fiscal year end and the audit report date, and is informative about audit efficiency. Although a substantial body of literature investigates the determinants of audit report lag, scant empirical evidence exists on the consequences of audit report lag. Using data from Chinese listed companies we find evidence that abnormally long audit report lag increases the risk of a future stock price crash. We further document that this adverse consequence is more pronounced for firms with a poor internal control environment. Our research contributes to the literature on audit report lag, stock price crash risk and the effectiveness of internal control.