Audit Quality, Legal and Disclosure Environments, and Analysts' Forecast Accuracy: Some International Evidence
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.
Audit quality, analysts' forecasts accuracy, legal environment, disclosure, international
Accounting | Corporate Finance | Finance and Financial Management
Asia-Pacific Journal of Accounting & Economics Symposium
Choi, Jong-Hag; Kang, Tony; Kwon, Young Koan; and Zang, Yoonseok.
Audit Quality, Legal and Disclosure Environments, and Analysts' Forecast Accuracy: Some International Evidence. (2005). Asia-Pacific Journal of Accounting &amp; Economics Symposium. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/73