Business Commons^™

Bringing Darkness To Light: The Influence Of Auditor Quality And Audit Committee Expertise On The Timeliness Of Financial Statement Restatement Disclosures, Jaime Schmidt, Michael S. Wilkins

School of Business Faculty Research

This study investigates whether auditor quality and audit committee expertise are associated with improved financial reporting timeliness as measured by the duration of a financial statement restatement’s ‘‘dark period.’’ The restatement dark period represents the length of time between a company’s discovery that it will need to restate financial data and the subsequent disclosure of the restatement’s effect on earnings. For a sample of dark restatements disclosed between 2004 and 2009, we find that companies that engage Big 4 auditors have shorter dark periods than companies that do not engage Big 4 auditors. We also find that companies with more …