Definition and measurement of the variables
| Variables | Description |
|---|---|
| Dependent_Variable | |
| DisKM | The natural log of the distance (in kilometers) between the auditor's and client's offices |
| DisMN | The natural log of the distance (in minutes) between the auditor's and client's offices |
| Aud_Fee | The natural logarithm of the amount of audit fees paid by the firm |
| Independent_Variables | |
| Chair_Narc | A composite score derived from multiplying the chair's signature size and picture size scores (see below) |
| CEO_Narc | A composite score derived from multiplying the_CEO's signature size and picture size scores (see below) |
| Chair_Narc_Sig | Size of Chair's signature calculated as the rectangle's area (length × width in inch) divided by the number of letters in the Chair's name |
| CEO_Narc_Sig | Size of CEO's signature calculated as the rectangle's area (length × width in inch) divided by the number of letters in the CEO's name |
| Chair_Narc_Pic | A 0–4 score for the Chair's picture size in the annual report, ranging from no picture to a group photo with other executives or CEO, half-page, or full-page coverage |
| CEO_Narc_Pic | A 0–4 score for the CEO's picture size in annual reports, ranging from no picture to a group photo with other executive or chair, half-page, or full-page coverage |
| Control variables | |
| Chair_Gen | An indicator variable of 1 if the chair of the firm is female; and 0 otherwise |
| CEO_Gen | An indicator variable of 1 if the CEO of the firm is female; and 0 otherwise |
| FDR | Female director's ratio measured as the proportion of female members on the board |
| IDR | Independent director's ratio measured as the proportion of independent directors on the board |
| AC_Size | The size of the audit committees in numbers |
| Aud_Lag | The number of days between accounting year end date and date of signing the audit report |
| Aud_Ten | The number of years current audit firm is auditing the client |
| Big4 | An indicator variable of 1 if the audit firm is one of the big-4 auditors; and 0 otherwise |
| Firm_Size | Natural logarithm of total assets indicating the size of the firm |
| Firm_Age | Natural logarithm of number of years in business from the listing year |
| ROA | Return on Asset measured as the net profit divided by total assets |
| Lev | The ratio of debt to total assets |
| YearEnd | An indicator variable coded 1 if the reporting year ended on December; and 0 otherwise. |
| Mediating variables | |
| Jones91 | Discretionary accruals model following Jones (1991) as the proxy for audit quality |
| Stubben10 | Discretionary accruals model following Stubben (2010) as the proxy for audit quality |
| SP | Small profit is an indicator variable equal to 1 if profit is less than 1% of total assets; and 0 otherwise |
| ARL | Audit report lag is measured as the number of days from the accounting year-end to the issuance of the audit report |
| Variables | Description |
|---|---|
| DisKM | The natural log of the distance (in kilometers) between the auditor's and client's offices |
| DisMN | The natural log of the distance (in minutes) between the auditor's and client's offices |
| Aud_Fee | The natural logarithm of the amount of audit fees paid by the firm |
| Chair_Narc | A composite score derived from multiplying the chair's signature size and picture size scores (see below) |
| CEO_Narc | A composite score derived from multiplying the_CEO's signature size and picture size scores (see below) |
| Chair_Narc_Sig | Size of Chair's signature calculated as the rectangle's area (length × width in inch) divided by the number of letters in the Chair's name |
| CEO_Narc_Sig | Size of CEO's signature calculated as the rectangle's area (length × width in inch) divided by the number of letters in the CEO's name |
| Chair_Narc_Pic | A 0–4 score for the Chair's picture size in the annual report, ranging from no picture to a group photo with other executives or CEO, half-page, or full-page coverage |
| CEO_Narc_Pic | A 0–4 score for the CEO's picture size in annual reports, ranging from no picture to a group photo with other executive or chair, half-page, or full-page coverage |
| Chair_Gen | An indicator variable of 1 if the chair of the firm is female; and 0 otherwise |
| CEO_Gen | An indicator variable of 1 if the CEO of the firm is female; and 0 otherwise |
| FDR | Female director's ratio measured as the proportion of female members on the board |
| IDR | Independent director's ratio measured as the proportion of independent directors on the board |
| AC_Size | The size of the audit committees in numbers |
| Aud_Lag | The number of days between accounting year end date and date of signing the audit report |
| Aud_Ten | The number of years current audit firm is auditing the client |
| Big4 | An indicator variable of 1 if the audit firm is one of the big-4 auditors; and 0 otherwise |
| Firm_Size | Natural logarithm of total assets indicating the size of the firm |
| Firm_Age | Natural logarithm of number of years in business from the listing year |
| ROA | Return on Asset measured as the net profit divided by total assets |
| Lev | The ratio of debt to total assets |
| YearEnd | An indicator variable coded 1 if the reporting year ended on December; and 0 otherwise. |
| Jones91 | Discretionary accruals model following |
| Stubben10 | Discretionary accruals model following |
| SP | Small profit is an indicator variable equal to 1 if profit is less than 1% of total assets; and 0 otherwise |
| ARL | Audit report lag is measured as the number of days from the accounting year-end to the issuance of the audit report |
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