Author : J. Efrim Boritz
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (13 download)
Book Synopsis Voluntary Assurance on Interim Financial Statements and Earnings Quality by : J. Efrim Boritz
Download or read book Voluntary Assurance on Interim Financial Statements and Earnings Quality written by J. Efrim Boritz and published by . This book was released on 2014 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Under current Canadian securities regulatory requirements, public companies are able to choose whether to have their interim financial statements reviewed by external auditors on a quarter by quarter basis, but they must disclose when there has been no review performed. This differs from US practice where the Securities and Exchange Commission (SEC) requires a timely review of interim financial statements by the company's auditor. Thus, the Canadian regulatory environment provides a natural laboratory to study the association between the determinants of voluntary reviews and earnings quality. Our study provides evidence that large and highly levered firms with independent board of directors tend to have their interim statements reviewed voluntarily. Moreover, quarterly discretionary accruals of reviewed firms are generally smaller than those of non-reviewed firms, reflecting better earnings quality. We control for possible self-selection bias in our empirical tests.