Additional evidence on audit report lag

W. Robert Knechel, Jeff L. Payne

Research output: Contribution to journalArticlepeer-review

239 Scopus citations


The process for providing accounting information to the public has not changed much in the last century even though the extent of disclosure has increased significantly. Sundem et al. (1996) suggest that the primary benefit of audited financial statements may not be decision usefulness but the discipline imposed by timely confirmation of previously available information. In general, the value of information from the audited financial statement will decline as the audit report lag (the time period between a company's fiscal year end and the date of the audit report) increases since competitively oriented users may obtain substitute sources of information. Furthermore, the literature on earnings quality and earnings management suggests that unexpected reporting delays may be associated with lower quality information. The purpose of this paper is to extend our understanding about the determinants of audit report lag using a proprietary database containing 226 audit engagements from an international public accounting firm. We examine three previously uninvestigated audit firm factors that potentially influence audit report lag and are controllable by the auditor: (1) incremental audit effort (e.g., hours), (2) the resource allocation of audit team effort measured by rank (partner, manager, or staff), and (3) the provision of nonaudit services (MAS and tax). The results indicate that incremental audit effort, the presence of contentious tax issues, and the use of less experienced audit staff are positively correlated with audit report lag. Further, audit report lag is decreased by the potential synergistic relationship between MAS and audit services.

Original languageEnglish
Pages (from-to)137-146
Number of pages10
Issue number1
StatePublished - Mar 2001


  • Audit report lag
  • Earnings quality

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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