Litigation against clients and audit report lag: an examination of the role of state ownership and regional legal development in China
Document Type
Article
Keywords
China; Contingencies; Audit Reports; Audit Lag; Litigation Against Clients
Identifier Data
https://doi.org/10.1108/MAJ-02-2020-2557
Publisher
Emerald Publishing Limited
Publication Source
Managerial Auditing Journal
Rights Management
Copyright © 2021, Emerald Publishing Limited
Abstract
Companies may be defendants in lawsuits that are unresolved at year-end. This paper aims to consider whether the financial statements of companies facing litigation claims (pending litigation) are more time-consuming to audit due to the complexity and subjectivity of contingent liabilities associated with pending litigation. The authors consider whether auditors tailor their approach to pending litigation based on two distinct factors in the Chinese business environment: the client’s government ownership status and the legal development of the region in which the company is based.
