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RAAS 2024/12
Vol.14 No.2:
1-40
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Will the Importance of Companies' Overseas Subsidiaries under COVID-19 Extend the Gap in Financial Report Announcement Time? Perspective on Industry-Specialist Auditors
Yu-Shan Chang1, Min-Jeng Shiue2*, and Ian Wang3
1Department of Accounting, Tamkang University
2Department of Accountancy, National Taipei University
3Graduate School of Accounting, National Taipei University/EY Taiwan
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Abstract:
This study aims to investigate the extent to which the occurrence of the COVID-19 pandemic has led to an extension in the disparity of financial reporting deadlines for companies with significant overseas subsidiaries in comparison to the period before the pandemic. Furthermore, it examines whether industry experts, as opposed to non-industry experts, can effectively maintain audit quality in specific industries through alternative audit procedures. Empirical findings indicate that, following the COVID-19 pandemic, the gap in financial reporting deadlines has decreased. This might be attributed to regulatory authorities' ongoing efforts to align financial reporting deadlines with international standards. When considering the interaction between the COVID-19 pandemic and significant overseas subsidiaries, it is evident that having such subsidiaries indeed leads to an extension in the gap of financial reporting deadlines, but this result is only observed in the sub-sample of non-industry expert audits. The study further divides the regions of significant overseas subsidiaries into Mainland China and non-Mainland China regions, and the results show that when industry audit experts examine important overseas subsidiaries in non-Mainland China regions, they can significantly shorten the time for financial reporting. The empirical results of this paper confirm that even under the severe test and restrictions of the epidemic, industry audit experts can still conduct audits efficiently and shorten financial report audits in non-Mainland China regions. The empirical findings of this study not only provide local evidence on Taiwan's audit practices affected by the COVID-19 epidemic, but also directly echo the implementation of the policies that the competent authorities intend to implement.
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Keywords: COVID-19 pandemic; Financial reporting lags; Significant overseas subsidiaries; Auditor industry expertise
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Corresponding author
; e-mail: smj@gm.ntpu.edu.tw
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©
2024
Review of Accounting and Auditing Studies, ISSN 2221-9374
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