Auditor Tenure, Auditor Industry Expertise, and Audit Report Lag: Evidences of Iran

Authors

Gholamreza Karami Faculty of Management, University of Tehran, Tehran, Iran

Saba Salati Faculty of Management and Accounting, Allame Tabatabaie University, Tehran, Iran

Tahere Karimiyan Faculty of Management, University of Tehran, Tehran, Iran

Abstract:

The findings of theoretical investigations indicate that short-term auditor tenures may contribute to further audit report lags (ARLs). On the other hand, auditor industry expertise represents one of the determinant factors contributing to audit quality, which has been widely studied in numerous researches. Indeed, the better the quality of audit, the less delayed would be the audit report. As such, aiming at investigating the association between auditor tenure and ARL on the one hand, and studying the adjusting effect of auditor industry expertise on the other hand, the present research investigated 141 firms operating within 25 industries during 2010-2014. Chaw and Hausman Test results indicated, at 5% level of significance, that the corresponding regression model should be assessed with consistent effects. Furthermore, undertaking multivariate linear regression analysis, the research results implied no significance association between auditor tenure and ARL. In fact, the first hypothesis that auditor tenure is negatively related to ARL was rejected. On the other hand, the second hypothesis that auditor industry expertise may attenuate the association of auditor tenure and ARL was also rejected, meaning that, even with auditor industry expertise considered, a significant relationship between auditor tenure and audit report lag could not be recognized.

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