An Empirical Analysis on the Determinants of Audit Report Lag

Abstract

This study investigates the factors that affect audit report lag from the samples of Shanghai and Shenzhen Stock Exchange. The result shows that the financial leverage is positively associated with audit report lag. The result suggests that audit firms audit higher financial leverage companies more carefully to ensure the accuracy of the audit reports. This study also finds that the big 4 audit firms have a positive relationship with audit report lag. This finding indicates that the big 4 audit firms usually provide services for large companies and will audit financial statements more cautiously.