Variable definitions
| Variable | Definition |
|---|---|
| LAG | Natural logarithm of the number of days between the end of the year and the audit report issuance date |
| INTAUD | 1 when an interim audit is performed, and 0 otherwise |
| LNTA | Natural logarithm of total assets |
| LEV | Total liabilities divided by total assets |
| ROA | Net income divided by average total assets |
| LOSS | 1 when a loss is reported, and 0 otherwise |
| CONT | 1 when a firm reports contingent liabilities, and 0 otherwise |
| OVERLIST | 1 when a firm is also listed on a stock exchange other than the Shanghai and Shenzhen Stock Exchanges, and 0 otherwise |
| SOE | 1 when a firm is a state- owned entity, and 0 otherwise |
| BIG10 | 1 when a firm is audited by a Big 10 audit firm, and 0 otherwise |
| SUB | Number of subsidiaries |
| SWITCH | 1 when a firm changes its auditor(s), and 0 otherwise |
| OPIN | 1 when a modified opinion is issued, and 0 otherwise |
| RESTA | 1 when a restatement is issued, and 0 otherwise |
| GROWTH | Growth in sales |
| EPSG | 1 when a firm has positive earnings changes for four consecutive quarters, and 0 otherwise |
| MVBV | Market-to-book value ratio |
| RAISE | 1 when a firm has cash flows from equity financing, and 0 otherwise |
| AGE | Number of years since the firm is listed on the Shanghai and Shenzhen Stock Exchanges |
| TENURE | Length of period of the auditor-client relationship |
| IND | Industry indicator variables |
| YEAR | Year indicator variables |
| Variable | Definition |
|---|---|
| Natural logarithm of the number of days between the end of the year and the audit report issuance date | |
| 1 when an interim audit is performed, and 0 otherwise | |
| Natural logarithm of total assets | |
| Total liabilities divided by total assets | |
| Net income divided by average total assets | |
| 1 when a loss is reported, and 0 otherwise | |
| 1 when a firm reports contingent liabilities, and 0 otherwise | |
| 1 when a firm is also listed on a stock exchange other than the Shanghai and Shenzhen Stock Exchanges, and 0 otherwise | |
| 1 when a firm is a state- owned entity, and 0 otherwise | |
| 1 when a firm is audited by a Big 10 audit firm, and 0 otherwise | |
| Number of subsidiaries | |
| 1 when a firm changes its auditor(s), and 0 otherwise | |
| 1 when a modified opinion is issued, and 0 otherwise | |
| 1 when a restatement is issued, and 0 otherwise | |
| Growth in sales | |
| 1 when a firm has positive earnings changes for four consecutive quarters, and 0 otherwise | |
| Market-to-book value ratio | |
| 1 when a firm has cash flows from equity financing, and 0 otherwise | |
| Number of years since the firm is listed on the Shanghai and Shenzhen Stock Exchanges | |
| Length of period of the auditor-client relationship | |
| Industry indicator variables | |
| Year indicator variables |
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