Definition and measurement of the variables
| Variables | Description | Expected sign | Reference |
|---|---|---|---|
| Dependent variable | |||
| NUM_KAM | Number of KAMs disclosed by the auditor in the audit report | (Velte, 2020; Pinto and Morais, 2019; Rahaman et al., 2023) | |
| lnNum_KAM | The natural logarithm of the number of KAMs disclosed | (Velte, 2020; Pinto and Morais, 2019; Rahaman et al., 2023) | |
| WORD_KAM | Number of words used to explain KAMs disclosures | (Velte, 2020; Pinto and Morais, 2019; Rahaman and Karim, 2023; Rahaman et al., 2023) | |
| lnWord_KAM | The natural logarithm of number of words used to explain KAMs disclosures | (Velte, 2020; Pinto and Morais, 2019; Rahaman and Karim, 2023; Rahaman et al., 2023) | |
| Independent variables | |||
| lnProx_KM | Natural logarithm of geographic distance between auditor and client’s head offices measured in kilometers, multiplied by −1 | + | (Dong et al., 2018; Beck et al., 2019; Francis et al., 2022) |
| lnProx_Min | Natural logarithm of geographic distance between auditor and client’s head offices measured in minutes, multiplied by −1 | + | (Dong et al., 2018; Beck et al., 2019; 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, 2025) |
| IDR | Corporate governance variable measured by independent directors’ ratio (IDR) compared to total board size | + | (Rahaman et al., 2023; Rahaman and Karim, 2025) |
| FD_Ratio | The proportion of female directors on the board | −/+ | (Abdelfattah et al., 2020; Bepari, 2023; Rahaman et al., 2023) |
| AC size | Natural logarithm of number of members in audit committee | + | (Bepari, 2023; Rahaman et al., 2023) |
| ARL | Audit report lag (ARL) measured in days from accounting year end date to auditor’s report date | + | (Abdullatif and Al-Rahahleh, 2020; Habib and Bhuiyan, 2011) |
| Big4 | 1 if the audit firm is one of the Big-4 auditors and 0 otherwise | + | (Pinto and Morais, 2019; Rahaman et al., 2023) |
| Audit_Ten | Audit firm’s tenure with the client in years | + | (Pinto and Morais, 2019; Lin and Yen, 2022) |
| Audit fee | Log of audit fees paid by the company to the audit firm in BDT | + | (Pinto and Morais, 2019; Rahaman et al., 2023) |
| Firm size | Natural logarithm of total assets indicating the size of the firm | + | (Velte, 2020; Pinto and Morais, 2019; Rahaman et al., 2023) |
| Firm age | Firm age is measured in terms of the number of years from the establishment of the company | + | (Rahaman, Hossain and Bhuiyan, 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 measured in binary variable of 1 if the year ends at 31st December; 0 otherwise | + | (Rahaman et al., 2023; Rahaman and Karim, 2025) |
| Variables | Description | Expected sign | Reference |
|---|---|---|---|
| NUM_KAM | Number of KAMs disclosed by the auditor in the audit report | ( | |
| lnNum_KAM | The natural logarithm of the number of KAMs disclosed | ( | |
| WORD_KAM | Number of words used to explain KAMs disclosures | ( | |
| lnWord_KAM | The natural logarithm of number of words used to explain KAMs disclosures | ( | |
| lnProx_KM | Natural logarithm of geographic distance between auditor and client’s head offices measured in kilometers, multiplied by −1 | + | ( |
| lnProx_Min | Natural logarithm of geographic distance between auditor and client’s head offices measured in minutes, multiplied by −1 | + | ( |
| Chair_Gen | Chair gender, 1 if the chair of the board is female, 0 otherwise | − | ( |
| Corporate governance variable measured by independent directors’ ratio ( | + | ( | |
| FD_Ratio | The proportion of female directors on the board | −/+ | ( |
| Natural logarithm of number of members in audit committee | + | ( | |
| Audit report lag ( | + | ( | |
| Big4 | 1 if the audit firm is one of the Big-4 auditors and 0 otherwise | + | ( |
| Audit_Ten | Audit firm’s tenure with the client in years | + | ( |
| Audit fee | Log of audit fees paid by the company to the audit firm in | + | ( |
| Firm size | Natural logarithm of total assets indicating the size of the firm | + | ( |
| Firm age | Firm age is measured in terms of the number of years from the establishment of the company | + | ( |
| Return on assets, measures the profitability of the firm calculated as the net profit divided by total asset | + | ( | |
| YearEndDec31 | Year-end effect measured in binary variable of 1 if the year ends at 31st December; 0 otherwise | + | ( |
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