Audit quality and COVID-19 restrictions

IF 2.8 3区 管理学 Q2 BUSINESS, FINANCE
Sabrina Gong, Nam Ho, J. Jin, K. Kanagaretnam
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引用次数: 12

Abstract

Purpose This study aims to examine declines in audit quality after the COVID-19 travel restrictions/stay-at-home orders were issued in the USA in early 2020. Design/methodology/approach Taking advantage of variation in the dates of stay-at-home orders issued by different US states, this study identifies engagements that were significantly affected by the lock down orders. Findings The results suggest that engagements affected by the restrictions produced lower audit quality, as measured through restatements and discretionary accruals, relative to those completed before COVID-19 travel restrictions/stay-at-home orders. Further analysis reveals that this decrease in audit quality was attributable to firms with high inventory relative to assets, high R&D expenses relative to assets and non-Big 4 auditors. Practical implications This study finds that the restrictions on physical and on-site interaction caused auditors to universally struggle with resource/judgment-intensive accounts such as inventory and R&D expenditures. The results suggest that while Big 4 auditors managed to maintain their status quo level of audit quality following COVID-19 restrictions, non-Big 4 auditors were unable to overcome the challenges of an online work environment and their audit quality declined. Originality/value To the best of the authors’ knowledge, this paper is the first to empirically examine changes in audit quality as a response to a substantial change in auditors’ working environment due to the global health crisis. As work-from-home becomes more prevalent in audit firms, the results suggest that, on average, this move does diminish audit quality.
审计质量和COVID-19限制
本研究旨在研究2020年初美国发布COVID-19旅行限制/居家令后审计质量的下降情况。设计/方法/方法利用美国不同州发布的居家令日期的差异,本研究确定了受锁定令显著影响的约定。调查结果表明,与2019冠状病毒病(COVID-19)旅行限制/居家令之前完成的审计相比,受限制影响的审计业务产生了较低的审计质量(通过重述和酌情应计项目衡量)。进一步分析表明,审计质量的下降可归因于公司的高库存相对于资产,高研发费用相对于资产和非四大审计师。实际意义本研究发现,对实体和现场互动的限制导致审计师普遍难以处理资源/判断密集型账户,如库存和研发支出。结果表明,尽管四大审计机构在COVID-19限制后设法保持了现有的审计质量水平,但非四大审计机构无法克服在线工作环境的挑战,其审计质量有所下降。原创性/价值据作者所知,这篇论文是第一个实证研究审计质量的变化,作为对全球健康危机导致审计人员工作环境发生重大变化的反应。随着在家工作在审计公司变得越来越普遍,结果表明,平均而言,这一举措确实降低了审计质量。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
5.40
自引率
13.80%
发文量
45
期刊介绍: The key areas addressed are: ■Audit and Assurance (financial and non-financial) ■Financial and Managerial Reporting ■Governance, controls, risks and ethics ■Organizational issues including firm cultures, performance and development In addition, the evaluation of changes occurring in the auditing profession, as well as the broader fields of accounting and assurance, are also explored. Debates concerning organizational performance and professional competence are also covered.
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