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

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 a...

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Bibliographic Details
Main Authors: CHOI, Jong-Hag, KANG, Tony, KWON, Young Koan, ZANG, Yoonseok
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2005
Subjects:
Audit quality
analysts forecasts accuracy
legal environment
diclosure
international
Accounting
Business Law, Public Responsibility, and Ethics
Corporate Finance
Online Access:https://ink.library.smu.edu.sg/soa_research/124
https://ink.library.smu.edu.sg/context/soa_research/article/1123/viewcontent/Audit_Quality_Legal_and_Disclosure_Environments_and_Analysts_Forecast_Accuracy_av.pdf
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Institution: Singapore Management University
Language: English
Description
Summary: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.

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