Definition and measurement of the variables
| Dependent variables: | Description | Expected sign | Reference |
|---|---|---|---|
| Audit fee | Log of audit fees paid by the company to the audit firm in BDT | Pinto and Morais (2019); Rahaman et al. (2023) | |
| ARL | Audit report lag (ARL) measured in days from accounting year end date to auditor’s report date | Abdullatif et al. (2023) | |
| AQ | Audit quality measured based on three models: Jones (1991), Dechow and Dichev (2002), Stubben (2010) and Small Profit. | Abid et al. (2018); Hoitash et al. (2007); Francis and Wu (2009) | |
| Interest variables: | |||
| lnProx KM | Natural logarithm of geographic distance between auditor and client office measured in kilometers multiplied by −1 | + | Beck et al. (2019); Dong et al. (2018); Francis et al. (2022) |
| lnProx min | Natural logarithm of geographic distance between auditor and client office measured in minutes multiplied by −1 | + | Beck et al. (2019); Dong et al. (2018); Francis et al. (2022) |
| Control variables: | |||
| Chair gen | Chair gender, 1 if the chair of the board is female, 0 otherwise | – | Bepari (2023); Rahaman and Karim (2023) |
| FD ratio | The proportion of female directors on the board | −/+ | Abdelfattah et al. (2021); Bepari (2023); Rahaman et al. (2023) |
| AC size | Natural logarithm of number of members in audit committee | + | Bepari (2023); Rahaman et al. (2023) |
| Firm age | Firm age is measured in terms of the number of years from the establishment of the company | + | Rahaman et al. (2023) |
| Audit ten | Auditor’s tenure with the client in years | + | Lin and Yen (2022); Pinto and Morais (2019) |
| Firm size | Natural logarithm of total assets indicating the size of the firm | + | Pinto and Morais (2019); Rahaman et al. (2023) |
| ROA | Return on assets, measures the profitability of the firm calculated as the net profit divided by total asset | + | Pinto and Morais (2019); Rahaman et al. (2023) |
| YearEndDec31 | Year-end effect | + | Rahaman et al. (2023) |
| Big4 | 1 if the audit firm is one of the big-10 auditors and 0 otherwise | + | Pinto and Morais (2019); Rahaman et al. (2023) |
| IDR | Corporate governance variable measured by independent directors’ ratio (IDR) compared to total board size | + | Rahaman et al. (2023) |
| Dependent variables: | Description | Expected sign | Reference |
|---|---|---|---|
| Audit fee | Log of audit fees paid by the company to the audit firm in BDT | ||
| ARL | Audit report lag (ARL) measured in days from accounting year end date to auditor’s report date | ||
| AQ | Audit quality measured based on three models: | ||
| lnProx KM | Natural logarithm of geographic distance between auditor and client office measured in kilometers multiplied by −1 | + | |
| lnProx min | Natural logarithm of geographic distance between auditor and client office measured in minutes multiplied by −1 | + | |
| Chair gen | Chair gender, 1 if the chair of the board is female, 0 otherwise | – | |
| FD ratio | The proportion of female directors on the board | −/+ | |
| AC size | Natural logarithm of number of members in audit committee | + | |
| Firm age | Firm age is measured in terms of the number of years from the establishment of the company | + | |
| Audit ten | Auditor’s tenure with the client in years | + | |
| Firm size | Natural logarithm of total assets indicating the size of the firm | + | |
| ROA | Return on assets, measures the profitability of the firm calculated as the net profit divided by total asset | + | |
| YearEndDec31 | Year-end effect | + | |
| Big4 | 1 if the audit firm is one of the big-10 auditors and 0 otherwise | + | |
| IDR | Corporate governance variable measured by independent directors’ ratio (IDR) compared to total board size | + | |
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