Organizational capital and audit outcomes

Organizational capital and audit outcomes | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Organizational capital and audit outcomes Md. Samsul Alam, Mohammad Dulal Miah, Prem Puwanenthiren, Sivathaasan Nadarajah This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7837103/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract We investigate whether firms’ organizational capital affects audit outcomes. Using a large sample of U.S. 30,769 firm-year observations during the period 2000–2018, we find a negative association between organizational capital and audit fees, audit delays, going concern opinion, internal control weaknesses, and financial restatement. Our findings hold up to a battery of robustness checks and endogeneity tests. In cross-sectional analyses, we report that the negative effect of organizational capital on audit outcomes is more pronounced for firms located far away from their auditors, audited by non-specialist auditors, characterized by high information asymmetry and poor corporate governance. We further show that organizational capital reduces the probability of a lawsuit. Overall, our findings indicate that client firms’ organizational capital matters for audit outcomes. JEL classification: M41, M42 Organizational capital audit fee internal control going concern opinion Full Text Additional Declarations No competing interests reported. Declaration of interests The authors declare that we have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper. Supplementary Files HighlightsOC.docx Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. 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