Late for a very important date: financial reporting and audit implications of late 10-K filings

Jian Cao (), Feng Chen () and Julia L. Higgs ()
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Jian Cao: Florida Atlantic University
Feng Chen: University of Missouri
Julia L. Higgs: Florida Atlantic University

Review of Accounting Studies, 2016, vol. 21, issue 2, No 8, 633-671

Abstract: Abstract Delays in financial reports often reflect issues related to period-end accounting and audit processes. We investigate the impact of filing delays in connection with auditor characteristics on the quality of financial statements in a sample of firms that filed Form 10-K after the statutory due date. We find that late filing firms are associated with lower financial reporting quality compared to timely filing firms matched by propensity scores, where financial reporting quality is measured by the absolute value of performance-matched discretionary accruals and the probability of a late filing being restated in subsequent periods. Furthermore, we demonstrate that the adverse consequences of late filings can be largely mitigated by having a Big 4 auditor. The differential audit quality stems primarily from Big 4 auditors in large offices and is more pronounced when an auditor may need to draw on additional resources in a limited period.

Keywords: Restatements; Office size; Late SEC filings; Financial reporting quality; Big 4 auditors; Accruals (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11142-016-9351-5

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