The Effectiveness and Efficiency of Auditors’ Remote Work during COVID-19

Landi Morris, Rani Hoitash, Udi Hoitash

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

The COVID-19 pandemic introduced unprecedented challenges to the audits of public companies. Audit firms, in response, dedicated significant resources to maintain high-quality audit procedures. We leverage a difference-in-differences design to examine the effects of the pandemic on audit outcomes. Despite audit firm efforts, we find evidence of a decline in audit quality in the initial months of the COVID-19 pandemic. Further, in the early days of the pandemic, the SEC made available a unique one-time, 45-day extension to file the audited annual report. In this time period, we observe a significant increase in the likelihood of delayed filings, including those attributed to the auditors’ work. Our study informs regulators and audit firms about the broad impact of an unprecedented stressor on the audit process and on the efficacy of remote work.

Original languageEnglish (US)
Pages (from-to)223-245
Number of pages23
JournalAuditing
Volume42
Issue number4
DOIs
StatePublished - Nov 2023

Keywords

  • audit quality
  • coronavirus
  • COVID-19
  • delayed filings
  • discretionary accruals
  • material weakness errors
  • pandemic
  • remote work

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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