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Audit Quality, Legal and Disclosure Environments, and Analysts' Forecast Accuracy: Some International Evidence

Year: 2005

Type: article

Abstract: In this study, we investigate the relation between the quality of external audit and earnings predictability of firms situated in different legal and disclosure environments around the world. In a sample of multinational firms cross-listed in the United States, we find that the association between audit quality and forecast accuracy is stronger in weak legal and disclosure environments than in strong legal and disclosure environments. We interpret these results as suggesting that audit service can serve as an alternative device to improve market participants' information environment in weak legal and disclosure environments.

Source: Asia-Pacific Journal of Accounting & Economics

DOI: 10.1080/16081625.2005.10510647

Authors: Jong-Hag Choi, Tony Kang, Young K. Kwon, Yoonseok Zang

Institutions: Hong Kong University of Science and Technology, Singapore Management University, University of Illinois Urbana-Champaign

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1990998031

FWCI:

Cites: 48

Cited by: 11

Related to: 10