Litigation against clients and audit report lag: an examination of the role of state ownership and regional legal development in China

Document Type



China; Contingencies; Audit Reports; Audit Lag; Litigation Against Clients

Identifier Data


Emerald Publishing Limited

Publication Source

Managerial Auditing Journal

Rights Management

Copyright © 2021, Emerald Publishing Limited


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.