Earnings Announcement Delays and Implications for the Auditor-Client Relationship

Kimball Chapman
Olin School of Business
Washington University in St. Louis

Michael Drake
BYU Marriott School of Business
Brigham Young University

Joseph Schroeder
Kelley School of Business
Indiana University

Timothy Seidel
BYU Marriott School of Business
Brigham Young University

Wall Street Horizon Abstract

This study examines whether delays in earnings announcements have implications for the future auditor-client relationship. Managers have strong incentives to release earnings on schedule and auditors play an important role in helping their clients avoid costly earnings announcement delays. The authors find an increased likelihood of subsequent auditor-client realignments after earnings announcement (EA) delays (EA data sourced from Wall Street Horizon). Further findings that help inform regulatory concerns about audit market concentration and how audit firm turnover has the potential to impact the auditor-client dynamic are within.

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Earnings Announcement Delays and Implications for the Auditor-Client Relationship

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