Improvements In Audit Report Lag And Reporting Timeliness: A Non-Event For Technology Advances

Abstract

Technological advances have transformed the professional lives of all accountants. Consequential expectations would include improvements in the timing of the audit report and the reporting of financial information. There is a presumption in the empirical literature that audit report lag is a primary cause of financial reporting delay. This empirical research study finds little or no change in the audit report lag and timeliness of reporting during the period 1996 to 2001. Audit report lag appears to play a questionable role, if any, in financial reporting delays and other factors such as inertia and interest may be the major impediments to timely reporting. Finally, given the financial atmosphere after the Enron-Arthur Andersen debacle, our research finds no difference among auditing firms for the variables examined. While this could be interpreted in a positive manner, it could also indicate that all Big-5 firms potentially have similar problems.