The moderating effect of related parties’ transactions on the relation between auditor industry specialization with audit report lag
Subject Areas :
1 - گروه حسابداری، دانشکده علوم اجتماعی و اقتصادی دانشگاه الزهراء (س)، تهران، ایران
Keywords: auditor industry specialization, audit report lag, related parties, transactions.,
Abstract :
The timeliness of financial statements is one of the characteristics that significantly affects its relevance and is of great importance to investors and other users. This feature is closely related to the audit report lag. Therefore, the audit report lag can affect the information content of the financial statements. Several factors affect the audit report lag. In this research, the relation between auditor industry specialization with audit report lag, as well as the moderating effect of related parties, transactions on this relation was investigated. The statistical population of this research is the companies listed in Tehran Stock Exchange and Iran Farabours during the years 2011 to 2021. The hypotheses of this research have been tested using linear regression. The results of this research showed that there is a significant negative relationship between the auditor industry specialization and audit report lag. Also, related parties, transactions weaken the negative relation between auditor industry specialization and audit report lag.
References:
بزرگ اصل، موسی؛ رجب دری، حسین و خرمین، منوچهر، 1397. بررسی عوامل مؤثر بر انتشار به هنگام گزارش حسابرسی. مجله دانش حسابداری، 9 (1)، 115-146.
بیات، علی و علی احمدی، سعید، 1393. تأخیر حسابرسی و به موقع بودن گزارشگری مالی. پژوهش های حسابداری مالی و حسابرسی، 6(22)، 97-121.
حمیدیان، محسن؛ بزرگمهریان، شاهرخ و جنت مکان، حسین، 1397. نقش تخصص حسابرس در صنعت در پیشگیری از اعمال تغییر طبقه بندی فرصت طلبانه اقلام صورت سود و زیان. پژوهش‌های حسابداری مالی و حسابرسی، 10(38)، 93-113.
دارابی، رویا و داودخانی, محمود، 1394. تاثیر معاملات با اشخاص وابسته بر ارزش شرکت. پژوهش‌های حسابداری مالی و حسابرسی، 7(28)، 131-152.
صالحی، مهدی؛ تورچی، محمود و عبداله‌نژاد، رضا، 1396. تأثیر معاملات با اشخاص وابسته بر رابطه میان ارتباطات سیاسی و تأخیر در گزارش حسابرسی. پژوهش های تجربی حسابداری، 36(9), 249-268.
صفری گرایلی، مهدی، 1396. تاخیر غیرعادی گزارش حسابرسی و تجدید ارائه صورت‌های مالی آتی: نقش تعدیلی وابستگی اقتصادی و تخصص صنعت حسابرس. دانش حسابداری و حسابرسی مدیریت، 6(23), 155-168.
نعمتی، نسرین؛ گرجی‌زاده، داوود و خان محمدی، محمدحامد، 1400. عوامل مؤثر بر تأخیر گزارش حسابرسی در شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران. نشریه علمی رویکردهای پژوهشی نوین مدیریت و حسابداری، 5(16), 138-157.
واعظ، سیدعلی؛ بنافی، محمد و ویسی، سجاد، 1395. بررسی تأثیر تخصص حسابرس بر رابطة بین معاملات با اشخاص وابسته و حق‌الزحمة حسابرسی. بررسی‌های حسابداری، 3(12), 111-130.
Alavi Tabari, H. and Aref Menash. Z., 2013. Investigating the Relationship between the Audience Industry Specialty and the delay in the Presentation of the Audit Report in the Companies Accepted in the Tehran Stock Exchange. Journal of Accounting Knowledge, 4(14), 4- 26. (in Persian).
Al-gamrh, R. A. A. B., 2018. Related party transactions and audit fees: The role of the internal audit function. Journal of Management & Governance, 22(1), 187–212.
Ashton, R. H., Willingham, J.J. and Elliott, R. K., 1987. An empirical analysis of audit delay. Journal of Accounting Research, 25(2), 275-292.
Badawy, H. and Aly, A., 2018. The impact of auditor industry specialization, type of auditor and audit opinion on ARL: The Case of Egypt. International Journal of Accounting Research, 6(2), 184-192.
Bamber, E.M., Bamber, L.S. and Schoderbek, M.P., 1993. Audit structure and other determinants of audit report lag: an empirical analysis. Auditing: A Journal of Practice and Theory,12 (1), 1-23.
Bayat, A. and Ali Ahmadi, S., 2013. A delay audit and timeliness of financial reporting. The Financial Accounting and Auditing Researches, 6(22), 97-121 (in Persian).
Behn, B. K., Choi, J-H. and Kang, T., 2008. Audit quality and properties of analysts’ earnings forecasts. The Accounting Review, 83(2), 327–349.
Behn, B. K., Searcy, D. L. and Woodroof, J. B., 2006. A within firm analysis of current and expected future audit lag determinants. Journal of Information Systems, 20(1), 65-86.
Bozorgasl, M., Rajjabdorri, H. and Khorramin. M., 2018. Investigating the Factors Affecting Timely Audit Reports. Journal of Accounting Kmowledge. 9(1), 115-146 (in Persian).
Chambers, A.E. and Penman, S.H., 1984. Timeliness of reporting and the stock price reaction to earnings announcements. Journal of Accounting Research, 22 (1), 21-47.
Dao, M. and Pham, T., 2014. Audit tenure, auditor specialization and audit report lag. Managerial Auditing Journal, 29(6), 490-512.
Darabi, R. and Davodkhani, M., 2016. The effect of transactions with related parties on the value of the company. The Financial Accounting and Auditing Researches, 7(28), 131-152 (in persiana).
DeFond, M. and Zhang, J., 2014. A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326.
Dunn, K.A. and Mayhew, B.W., 2004. Audit firm industry specialization and client disclosure quality. Review of Accounting Studies. 9 (1), 35-58.
Fang, J., Lobo, G. J., Zhang, Y. and Zhao, Y., 2018. Auditing related party transactions: Evidence from audit opinions and restatements. Auditing, 37(2), 73–106.
Farumi, L., Wahyudi, T. and Khamisah, N., 2023. Influence of Audit Committee, Auditor Industry Specialization, and Audit Tenure on Audit Report Lag. Business Management Analysis Journal, 6(1), 58-77.
Fisman, R. and Wang, Y., 2010. Trading favors within Chinese business groups. American Economic Review, 100(2), 429–433.
Ge, W., Drury, D. H., Fortin, S., Liu, F. and Tsang, D., 2010. Value relevance of disclosed related party transactions. Advances in Accounting, 26(1), 134–141.
Givoly, D. and Palmon, D., 1982. Timeliness of annual earnings announcements: some empirical evidence. The Accounting Review, 57 (3), 486-508.
Green, W., 2008. Are industry specialists more efficient and effective in performing analytical procedures? A multi-stage analysis. International Journal of Auditing,12 (3), 243-260.
Habib, A. and Bhuiyan, M. B. U., 2011. Audit firm industry specialization and the audit report lag. Journal of international accounting, auditing and taxation, 20(1), 32-44.
Habib, A. and Muhammadi, A. H., 2018. Political connections and audit report lag: Indonesian evidence. International Journal of Accounting & Information Management, 26(1), 59-80.
Habib, A., Jiang, H. and Zhou, D., 2015. Related-party transactions and audit fees: Evidence from China, 14(1), 1–26.
Hamidian, M., Bozorgmehrian, SH. and Janat makan, H., 2018. The role of auditor expertise in the industry in preventing opportunistic reclassification of profit and loss statement items, The Financial Accounting and Auditing Researches, 10(38), 93-113 (in Persian).
Huang, L., Endrawes, M. and Hellmann, A., 2015. An experimental examination of the effect of client size and auditors’ industry specialization on time pressure in Australia. Corporate Ownership & Control, 12(4), 398–408.
Khani, Z., Rajabdorri, H. and Jangjoo, H., 2019. The Moderator Role of Auditor's Expertise in the Industry on the Relationship between Characteristics of the Audit Committee and Audit Report Lag. Iranian Journal of Accounting, Auditing and Finance, 3(4), 1-11(in Persian).
Khanna, T. and Palepu, K., 2000. Is group affiliation profitable in emerging markets? An analysis of. The Journal of Finance, 55(2), 867–891.
Knechel, W.R. and Payne, J.L., 2001. Additional evidence on audit report lag. Auditing, 20 (1), 137-146.
Krishnan, G. V., 2003. Does Big 6 auditor industry expertise constrain earnings management? Accounting Horizons, 17(Supplement), 1–16.
Krishnan, G. V., 2005. The association between Big 6 auditor industry expertise and the asymmetric timeliness of earnings. Journal of Accounting, Auditing & Finance, 20(3), 209–228.
Kwon, S.Y. Lim, C.Y. and Tan, P., 2007. Legal systems and earnings quality: the role of auditor industry specialization. Auditing: A Journal of Practice and Theory, 26 (2), 25-55.
Mayhew, B. W. and Wilkins, M. S., 2003. Audit firm industry specialization as a differentiation strategy: Evidence from fees charged to firms going public. Auditing: A Journal of Practice & Theory, 22, 33–52
Monique, A. and Harymawan, I., 2022. The Influence of Industrial Specialization Auditor on Audit Report Lag. Journal of Accounting and Business Education, 6(2), 10-21.
Nemati, N., Gorjizade, D. and Khan Mohammadi, M.H., 2022. Factors affecting the delay of the audit report in the companies admitted to the Tehran Stock Exchange. Journal of New Research Approaches in Management and Accounting. 5(52), 138-157 (in persian).
Palmrose, Z. V., 1986. Audit Fees and Auditor Size: Further Evidence. Journal of Accounting Research, 24, 97-100.
Payne, J. L., 2008. The influence of audit firm specialization on analysts’ forecast errors. Auditing: A Journal of Practice & Theory, 27(2), 109–136.
Rasheed P. C, A. and Hawaldar, I. T., 2021. Related party transactions and audit risk. Cogent Business & Management, 8(1), 1888669.
Romanus, R. N., Maher, J. J. and Fleming, D. M., 2008. Auditor industry specialization, auditor changes, and accounting restatements. Accounting Horizons, 22(4), 389–413.
Romanus, R. N., Maher, J. J. and Fleming, D. M., 2008. Auditor industry specialization, auditor changes, and accounting restatements. Accounting Horizons, 22(4), 389–413.
Rusmin, R. and Evans, J., 2017. Audit quality and audit report lag: Case of Indonesian listed companies. Asian Review of Accounting, 25(2), 191–210.
Ryngaert, M. and Thomas, S., 2012. Not all related party transactions (RPTs) are the same: Ex ante versus Ex post RPTs. Journal of Accounting Research, 50(3), 845–882.
Safari gerayli, M., 2017. Abnormal Audit Report Lags and Future Restatements: Moderating Role of Economic Bonding and auditor industry specialization. Knowledge of management accounting and auditing, 6(23), 155-168 (in persian).
Salehi, M., Toorchi, M., and Abdolahnezhad khalilabad, R., 2020. Related Party Transactions and the Relation between Political Connections and Audit Report Lag. Empirical Research in Accounting, 10 (2), 161-268 (in persian).
Vaez, S.A., Banafi, M. and Vasi, S., 2016. Investigating the Effect of Auditor Expertise on the Relationship between Related Party Transactions and Audit Fees. Journal of Iranian Accounting Review, 3 (12), 111-130 (in persian).
Velury, U., 2003. The association between auditor industry specialization and earnings management. Research in Accounting Regulation, 16, 171–184.
Watts, R. L., and Zimmerman, J. L., 1983. Agency problems, auditing, and the theory of the firm: some evidence. Journal of Law & Economics, 26(3), 613–633.
Whitworth, J. D. and Lambert, T. A., 2014. Office-level characteristics of the big 4 and audit report timeliness. Auditing, 33(3), 129–152.
بزرگ اصل، موسی؛ رجب دری، حسین و خرمین، منوچهر، 1397. بررسی عوامل مؤثر بر انتشار به هنگام گزارش حسابرسی. مجله دانش حسابداری، 9 (1)، 115-146.
بیات، علی و علی احمدی، سعید، 1393. تأخیر حسابرسی و به موقع بودن گزارشگری مالی. پژوهش های حسابداری مالی و حسابرسی، 6(22)، 97-121.
حمیدیان، محسن؛ بزرگمهریان، شاهرخ و جنت مکان، حسین، 1397. نقش تخصص حسابرس در صنعت در پیشگیری از اعمال تغییر طبقه بندی فرصت طلبانه اقلام صورت سود و زیان. پژوهش‌های حسابداری مالی و حسابرسی، 10(38)، 93-113.
دارابی، رویا و داودخانی, محمود، 1394. تاثیر معاملات با اشخاص وابسته بر ارزش شرکت. پژوهش‌های حسابداری مالی و حسابرسی، 7(28)، 131-152.
صالحی، مهدی؛ تورچی، محمود و عبداله‌نژاد، رضا، 1396. تأثیر معاملات با اشخاص وابسته بر رابطه میان ارتباطات سیاسی و تأخیر در گزارش حسابرسی. پژوهش های تجربی حسابداری، 36(9), 249-268.
صفری گرایلی، مهدی، 1396. تاخیر غیرعادی گزارش حسابرسی و تجدید ارائه صورت‌های مالی آتی: نقش تعدیلی وابستگی اقتصادی و تخصص صنعت حسابرس. دانش حسابداری و حسابرسی مدیریت، 6(23), 155-168.
نعمتی، نسرین؛ گرجی‌زاده، داوود و خان محمدی، محمدحامد، 1400. عوامل مؤثر بر تأخیر گزارش حسابرسی در شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران. نشریه علمی رویکردهای پژوهشی نوین مدیریت و حسابداری، 5(16), 138-157.
واعظ، سیدعلی؛ بنافی، محمد و ویسی، سجاد، 1395. بررسی تأثیر تخصص حسابرس بر رابطة بین معاملات با اشخاص وابسته و حق‌الزحمة حسابرسی. بررسی‌های حسابداری، 3(12), 111-130.
Alavi Tabari, H. and Aref Menash. Z., 2013. Investigating the Relationship between the Audience Industry Specialty and the delay in the Presentation of the Audit Report in the Companies Accepted in the Tehran Stock Exchange. Journal of Accounting Knowledge, 4(14), 4- 26. (in Persian).
Al-gamrh, R. A. A. B., 2018. Related party transactions and audit fees: The role of the internal audit function. Journal of Management & Governance, 22(1), 187–212.
Ashton, R. H., Willingham, J.J. and Elliott, R. K., 1987. An empirical analysis of audit delay. Journal of Accounting Research, 25(2), 275-292.
Badawy, H. and Aly, A., 2018. The impact of auditor industry specialization, type of auditor and audit opinion on ARL: The Case of Egypt. International Journal of Accounting Research, 6(2), 184-192.
Bamber, E.M., Bamber, L.S. and Schoderbek, M.P., 1993. Audit structure and other determinants of audit report lag: an empirical analysis. Auditing: A Journal of Practice and Theory,12 (1), 1-23.
Bayat, A. and Ali Ahmadi, S., 2013. A delay audit and timeliness of financial reporting. The Financial Accounting and Auditing Researches, 6(22), 97-121 (in Persian).
Behn, B. K., Choi, J-H. and Kang, T., 2008. Audit quality and properties of analysts’ earnings forecasts. The Accounting Review, 83(2), 327–349.
Behn, B. K., Searcy, D. L. and Woodroof, J. B., 2006. A within firm analysis of current and expected future audit lag determinants. Journal of Information Systems, 20(1), 65-86.
Bozorgasl, M., Rajjabdorri, H. and Khorramin. M., 2018. Investigating the Factors Affecting Timely Audit Reports. Journal of Accounting Kmowledge. 9(1), 115-146 (in Persian).
Chambers, A.E. and Penman, S.H., 1984. Timeliness of reporting and the stock price reaction to earnings announcements. Journal of Accounting Research, 22 (1), 21-47.
Dao, M. and Pham, T., 2014. Audit tenure, auditor specialization and audit report lag. Managerial Auditing Journal, 29(6), 490-512.
Darabi, R. and Davodkhani, M., 2016. The effect of transactions with related parties on the value of the company. The Financial Accounting and Auditing Researches, 7(28), 131-152 (in persiana).
DeFond, M. and Zhang, J., 2014. A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326.
Dunn, K.A. and Mayhew, B.W., 2004. Audit firm industry specialization and client disclosure quality. Review of Accounting Studies. 9 (1), 35-58.
Fang, J., Lobo, G. J., Zhang, Y. and Zhao, Y., 2018. Auditing related party transactions: Evidence from audit opinions and restatements. Auditing, 37(2), 73–106.
Farumi, L., Wahyudi, T. and Khamisah, N., 2023. Influence of Audit Committee, Auditor Industry Specialization, and Audit Tenure on Audit Report Lag. Business Management Analysis Journal, 6(1), 58-77.
Fisman, R. and Wang, Y., 2010. Trading favors within Chinese business groups. American Economic Review, 100(2), 429–433.
Ge, W., Drury, D. H., Fortin, S., Liu, F. and Tsang, D., 2010. Value relevance of disclosed related party transactions. Advances in Accounting, 26(1), 134–141.
Givoly, D. and Palmon, D., 1982. Timeliness of annual earnings announcements: some empirical evidence. The Accounting Review, 57 (3), 486-508.
Green, W., 2008. Are industry specialists more efficient and effective in performing analytical procedures? A multi-stage analysis. International Journal of Auditing,12 (3), 243-260.
Habib, A. and Bhuiyan, M. B. U., 2011. Audit firm industry specialization and the audit report lag. Journal of international accounting, auditing and taxation, 20(1), 32-44.
Habib, A. and Muhammadi, A. H., 2018. Political connections and audit report lag: Indonesian evidence. International Journal of Accounting & Information Management, 26(1), 59-80.
Habib, A., Jiang, H. and Zhou, D., 2015. Related-party transactions and audit fees: Evidence from China, 14(1), 1–26.
Hamidian, M., Bozorgmehrian, SH. and Janat makan, H., 2018. The role of auditor expertise in the industry in preventing opportunistic reclassification of profit and loss statement items, The Financial Accounting and Auditing Researches, 10(38), 93-113 (in Persian).
Huang, L., Endrawes, M. and Hellmann, A., 2015. An experimental examination of the effect of client size and auditors’ industry specialization on time pressure in Australia. Corporate Ownership & Control, 12(4), 398–408.
Khani, Z., Rajabdorri, H. and Jangjoo, H., 2019. The Moderator Role of Auditor's Expertise in the Industry on the Relationship between Characteristics of the Audit Committee and Audit Report Lag. Iranian Journal of Accounting, Auditing and Finance, 3(4), 1-11(in Persian).
Khanna, T. and Palepu, K., 2000. Is group affiliation profitable in emerging markets? An analysis of. The Journal of Finance, 55(2), 867–891.
Knechel, W.R. and Payne, J.L., 2001. Additional evidence on audit report lag. Auditing, 20 (1), 137-146.
Krishnan, G. V., 2003. Does Big 6 auditor industry expertise constrain earnings management? Accounting Horizons, 17(Supplement), 1–16.
Krishnan, G. V., 2005. The association between Big 6 auditor industry expertise and the asymmetric timeliness of earnings. Journal of Accounting, Auditing & Finance, 20(3), 209–228.
Kwon, S.Y. Lim, C.Y. and Tan, P., 2007. Legal systems and earnings quality: the role of auditor industry specialization. Auditing: A Journal of Practice and Theory, 26 (2), 25-55.
Mayhew, B. W. and Wilkins, M. S., 2003. Audit firm industry specialization as a differentiation strategy: Evidence from fees charged to firms going public. Auditing: A Journal of Practice & Theory, 22, 33–52
Monique, A. and Harymawan, I., 2022. The Influence of Industrial Specialization Auditor on Audit Report Lag. Journal of Accounting and Business Education, 6(2), 10-21.
Nemati, N., Gorjizade, D. and Khan Mohammadi, M.H., 2022. Factors affecting the delay of the audit report in the companies admitted to the Tehran Stock Exchange. Journal of New Research Approaches in Management and Accounting. 5(52), 138-157 (in persian).
Palmrose, Z. V., 1986. Audit Fees and Auditor Size: Further Evidence. Journal of Accounting Research, 24, 97-100.
Payne, J. L., 2008. The influence of audit firm specialization on analysts’ forecast errors. Auditing: A Journal of Practice & Theory, 27(2), 109–136.
Rasheed P. C, A. and Hawaldar, I. T., 2021. Related party transactions and audit risk. Cogent Business & Management, 8(1), 1888669.
Romanus, R. N., Maher, J. J. and Fleming, D. M., 2008. Auditor industry specialization, auditor changes, and accounting restatements. Accounting Horizons, 22(4), 389–413.
Romanus, R. N., Maher, J. J. and Fleming, D. M., 2008. Auditor industry specialization, auditor changes, and accounting restatements. Accounting Horizons, 22(4), 389–413.
Rusmin, R. and Evans, J., 2017. Audit quality and audit report lag: Case of Indonesian listed companies. Asian Review of Accounting, 25(2), 191–210.
Ryngaert, M. and Thomas, S., 2012. Not all related party transactions (RPTs) are the same: Ex ante versus Ex post RPTs. Journal of Accounting Research, 50(3), 845–882.
Safari gerayli, M., 2017. Abnormal Audit Report Lags and Future Restatements: Moderating Role of Economic Bonding and auditor industry specialization. Knowledge of management accounting and auditing, 6(23), 155-168 (in persian).
Salehi, M., Toorchi, M., and Abdolahnezhad khalilabad, R., 2020. Related Party Transactions and the Relation between Political Connections and Audit Report Lag. Empirical Research in Accounting, 10 (2), 161-268 (in persian).
Vaez, S.A., Banafi, M. and Vasi, S., 2016. Investigating the Effect of Auditor Expertise on the Relationship between Related Party Transactions and Audit Fees. Journal of Iranian Accounting Review, 3 (12), 111-130 (in persian).
Velury, U., 2003. The association between auditor industry specialization and earnings management. Research in Accounting Regulation, 16, 171–184.
Watts, R. L., and Zimmerman, J. L., 1983. Agency problems, auditing, and the theory of the firm: some evidence. Journal of Law & Economics, 26(3), 613–633.
Whitworth, J. D. and Lambert, T. A., 2014. Office-level characteristics of the big 4 and audit report timeliness. Auditing, 33(3), 129–152.
