Does Corporate Social Responsibility Affect the Timeliness of Audited Financial Information? Evidence from “100 Best Corporate Citizens”

Ebenezer K. Lamptey (), Jin Dong Park and Isaac Bonaparte
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Ebenezer K. Lamptey: Department of Accounting, Finance, and Economics, College of Business, Tarleton State University, Fort Worth, Crowley, TX 76036, USA
Jin Dong Park: Department of Accounting, College of Business and Economics, Towson University, Towson, MD 21252, USA
Isaac Bonaparte: Department of Accounting, College of Business and Economics, Towson University, Towson, MD 21252, USA

JRFM, 2023, vol. 16, issue 2, 1-21

Abstract: Companies are under immense pressure to integrate activities that will improve society and the environment with their business objectives. Such integration is likely to introduce complexity into the firms’ activities and impact the timeliness of the financial statements. Audit report lag is significant to investors as it directly impacts investor decision-making and investment fortunes. This study examines the association between corporate social responsibility (CSR) and audit report lag. We measure CSR activities using a composite variable representing a firm’s inclusion on or exclusion from the annual list of “100 Best Corporate Citizens.” In the robust regression analyses with a sample of 3661 firm-year observations from 2011 to 2016, we found a positive and significant association between CSR activities and audit report lag after controlling for extraneous variables potentially influencing audit report lag. Furthermore, the additional results with the six CSR components in the list confirm our finding that, except for governance, all the other components, such as environment, climate change, human rights, employee relations, and philanthropy, have a positive and significant association with audit report lag. Our findings suggest that CSR activities introduce audit complexities and risks that compel auditors to assess a high risk of material misstatements, translating into more audit effort and longer times to complete audits.

Keywords: corporate social responsibility; audit report lag; CSR activities; 100 Best Corporate Citizens; audit complexity (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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