How do auditors react to insider trading in client firms？ This paper examines the effects of insider trading on the audit report date. Insiders tend to urge managers to manage earnings to make more profits through tr...How do auditors react to insider trading in client firms？ This paper examines the effects of insider trading on the audit report date. Insiders tend to urge managers to manage earnings to make more profits through trading their own firm＇s shares. If auditors play an important role in monitoring managers, they may pay more attention to insider trading, which may delay the filing of audit reports. We find that the more the insiders trade their stocks, the longer the audit report lag is. In addition, to address the effectiveness of auditors＇ efforts to prevent managers from earnings management, we test whether an extra effort by auditors can reduce aggressive accounting. We also find that auditors deter aggressive accounting by stretching report lag in response to insider trading, implying that auditors＇ efforts weaken insiders＇ opportunistic behavior. This study contributes to the literature by providing evidence that insider trading is a significant determinant of the audit report lag. We suggest that auditors are interested in insiders＇ activity and it can enhance the quality of accounting information.展开更多
The aim of this study is to investigate the effect of auditor type and eamings reporting lag on the cost of debt for the Tunisian setting. Our sample consists of 32 Tunisian companies for the period of 2003-2012. Audi...The aim of this study is to investigate the effect of auditor type and eamings reporting lag on the cost of debt for the Tunisian setting. Our sample consists of 32 Tunisian companies for the period of 2003-2012. Audit quality is measured by auditor size （Big 4 versus non-Big 4） and timely disclosure is proxied by earnings reporting lag. Results show that auditor type is negatively associated with the cost of debt. By contrast, the association between earnings announcement lag and the cost of debt is positive and significant. When testing for the moderating effects of industry and listing status, we document that these associations are more pronounced for industrial companies and listed firms. Finally, the period of investigation slightly moderates the examined associations, since financial institutions become more sensitive to the tardy communication of information and less concerned with auditor type following some economic and political troubles in Tunisia between 2010 and 2012. Our findings have policy implications for managers in the Tunisian setting and other developing economies similar to Tunisia given the crucial role played by debt as an important source of external finance for companies.展开更多
文摘How do auditors react to insider trading in client firms？ This paper examines the effects of insider trading on the audit report date. Insiders tend to urge managers to manage earnings to make more profits through trading their own firm＇s shares. If auditors play an important role in monitoring managers, they may pay more attention to insider trading, which may delay the filing of audit reports. We find that the more the insiders trade their stocks, the longer the audit report lag is. In addition, to address the effectiveness of auditors＇ efforts to prevent managers from earnings management, we test whether an extra effort by auditors can reduce aggressive accounting. We also find that auditors deter aggressive accounting by stretching report lag in response to insider trading, implying that auditors＇ efforts weaken insiders＇ opportunistic behavior. This study contributes to the literature by providing evidence that insider trading is a significant determinant of the audit report lag. We suggest that auditors are interested in insiders＇ activity and it can enhance the quality of accounting information.
文摘The aim of this study is to investigate the effect of auditor type and eamings reporting lag on the cost of debt for the Tunisian setting. Our sample consists of 32 Tunisian companies for the period of 2003-2012. Audit quality is measured by auditor size （Big 4 versus non-Big 4） and timely disclosure is proxied by earnings reporting lag. Results show that auditor type is negatively associated with the cost of debt. By contrast, the association between earnings announcement lag and the cost of debt is positive and significant. When testing for the moderating effects of industry and listing status, we document that these associations are more pronounced for industrial companies and listed firms. Finally, the period of investigation slightly moderates the examined associations, since financial institutions become more sensitive to the tardy communication of information and less concerned with auditor type following some economic and political troubles in Tunisia between 2010 and 2012. Our findings have policy implications for managers in the Tunisian setting and other developing economies similar to Tunisia given the crucial role played by debt as an important source of external finance for companies.
