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Organizational resilience of audit firms - evidence from the outbreak of the COVID-19
Funding Information: The authors acknowledge the helpful comments and suggestions from Christopher Bleibtreu, Claus Holm, Per-Christen Trønnes, Kam-Ming Wan, and the workshop participants at Aarhus University School of Business and the 2021 EARNet Symposium. The authors also gratefully acknowledge the financial support from the OP Group Research Foundation, the Foundation for Economic Education and The Finnish Foundation for Share Promotion. The authors thank Jonas Söderlund and André Hellén for excellent research assistance. Publisher Copyright: © 2023, Jesper Haga and Kim Ittonen. ; Purpose This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created unanticipated barriers for auditors in Hong Kong. The authors expect that auditors with greater organizational resilience can respond to unexpected situations and restore expected performance levels relatively quickly. Design/methodology/approach The authors utilize a sample of 1,008 companies listed on Hong Kong Stock Exchange (HKEX) with a financial year-end of December 31. The authors identify five proxies contributing to organizational resilience: auditor size, industry specialization, diversity, geographic proximity to the client and auditing a new client. The authors use audit report timeliness as this study's main dependent variable. Findings This study's full-sample results suggest that larger auditors, industry specialists and auditors with closer relationships to clients issued more timely audit reports during the pandemic. The analysis of a subsample of companies that initially published unaudited financial statements reveals that industry expertise and longer auditor-client relationships significantly reduced the need for year-end audit adjustments. Finally, the authors find that larger auditors were more likely to offload clients, whereas industry specialists were more likely to retain clients. Research limitations/implications The results ...
Organizational resilience of audit firms - evidence from the outbreak of the COVID-19
Funding Information: The authors acknowledge the helpful comments and suggestions from Christopher Bleibtreu, Claus Holm, Per-Christen Trønnes, Kam-Ming Wan, and the workshop participants at Aarhus University School of Business and the 2021 EARNet Symposium. The authors also gratefully acknowledge the financial support from the OP Group Research Foundation, the Foundation for Economic Education and The Finnish Foundation for Share Promotion. The authors thank Jonas Söderlund and André Hellén for excellent research assistance. Publisher Copyright: © 2023, Jesper Haga and Kim Ittonen. ; Purpose This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created unanticipated barriers for auditors in Hong Kong. The authors expect that auditors with greater organizational resilience can respond to unexpected situations and restore expected performance levels relatively quickly. Design/methodology/approach The authors utilize a sample of 1,008 companies listed on Hong Kong Stock Exchange (HKEX) with a financial year-end of December 31. The authors identify five proxies contributing to organizational resilience: auditor size, industry specialization, diversity, geographic proximity to the client and auditing a new client. The authors use audit report timeliness as this study's main dependent variable. Findings This study's full-sample results suggest that larger auditors, industry specialists and auditors with closer relationships to clients issued more timely audit reports during the pandemic. The analysis of a subsample of companies that initially published unaudited financial statements reveals that industry expertise and longer auditor-client relationships significantly reduced the need for year-end audit adjustments. Finally, the authors find that larger auditors were more likely to offload clients, whereas industry specialists were more likely to retain clients. Research limitations/implications The results ...
Organizational resilience of audit firms - evidence from the outbreak of the COVID-19
Haga, Jesper (author) / Ittonen, Kim (author) / Finance, Vaasa / Accounting, Vaasa / Accounting, Helsinki
2024-02-06
Article (Journal)
Electronic Resource
English
organizational resilience , SDG 11 - Sustainable Cities and Communities , audit delay , and governance , covid-19 , 0- Ingen affiliation med ett företag , KOTA2024? , audit quality , SDG 8 - Decent Work and Economic Growth , auditing , accounting , audit fees , auditor resignations , 1- Publicerad utomlands , 2 - Hybrid open access publication channel , Justice and Strong Institutions , audit firms , AoS: Financial management , 1,0 , Innovation , PREM0000 , and Infrastructure , 1 - Publication available open access by the publisher , SDG 9 - Industry , audit adjustments , 512 Business and Management , 1 - Self archived , 0- Ingen av författarna har en utländsk affiliation , PRJ , SDG 16 - Peace
DDC:
690
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