Title

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

Publication Type

Journal Article

Publication Date

2005

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.

Discipline

Accounting | Business Law, Public Responsibility, and Ethics | Corporate Finance

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Asia-Pacific Journal of Accounting and Economics

Volume

12

Issue

1

First Page

37

Last Page

58

ISSN

1608-1625

Identifier

10.1080/16081625.2005.10510647

Publisher

Taylor and Francis