Table 3 Flight delay and audit quality...

Table 3

Flight delay and audit quality

Variables	(1)	(2)	(3)	(4)
	Restate	Restate	Ln(Audit fee)	Ln(Audit fee)
	Logit	Logit	OLS	OLS
Total delay	−1.124***	−1.182***	1.504***	0.195***
Total delay	[−3.81]	[−3.53]	[9.37]	[3.41]
Big4		0.106		0.378***
Big4		[1.25]		[18.52]
ROA		−0.371		−1.009***
ROA		[−1.03]		[−12.76]
Loss		−0.196**		−0.011
Loss		[−2.17]		[−0.59]
Ln(Size)		0.104***		0.485***
Ln(Size)		[5.27]		[89.57]
Leverage		0.228**		0.034
Leverage		[2.06]		[1.20]
Book-to-market		0.050***		−0.009**
Book-to-market		[2.93]		[−2.56]
Receivable		0.143		0.744***
Receivable		[0.57]		[10.60]
Inventory		−0.229		0.374***
Inventory		[−0.66]		[4.42]
Busy		−0.425***		0.051***
Busy		[−6.19]		[2.73]
Auditor change		0.027		−0.289***
Auditor change		[0.35]		[−15.35]
Debt		−0.005		0.037***
Debt		[−0.40]		[13.87]
Unqualified opinion		0.008		−0.102***
Unqualified opinion		[0.15]		[−9.03]
Major exchange		−0.237***		0.025
Major exchange		[−2.79]		[1.17]
Restatement		3.256***		0.055***
Restatement		[48.51]		[3.80]
Internal control weakness		1.110***		0.153***
Internal control weakness		[15.38]		[8.42]
Auditor tenure		−0.008		0.000
Auditor tenure		[−0.91]		[0.10]
The net tone in 10K		−15.884**		−15.853***
The net tone in 10K		[−2.27]		[−9.08]
Constant	−1.722***	−2.790***	13.478***	10.434***
Constant	[−4.77]	[−6.59]	[256.11]	[238.10]
Year FE	YES	YES	YES	YES
Industry FE	YES	YES	YES	YES
Observations	25,933	25,933	25,933	25,933
Pseudo/Adjusted R²	0.045	0.251	0.272	0.853

Variables	(1)	(2)	(3)	(4)
	Restate	Restate	Ln(Audit fee)	Ln(Audit fee)
	Logit	Logit	OLS	OLS
Total delay	−1.124***	−1.182***	1.504***	0.195***
Total delay	[−3.81]	[−3.53]	[9.37]	[3.41]
Big4		0.106		0.378***
Big4		[1.25]		[18.52]
ROA		−0.371		−1.009***
ROA		[−1.03]		[−12.76]
Loss		−0.196**		−0.011
Loss		[−2.17]		[−0.59]
Ln(Size)		0.104***		0.485***
Ln(Size)		[5.27]		[89.57]
Leverage		0.228**		0.034
Leverage		[2.06]		[1.20]
Book-to-market		0.050***		−0.009**
Book-to-market		[2.93]		[−2.56]
Receivable		0.143		0.744***
Receivable		[0.57]		[10.60]
Inventory		−0.229		0.374***
Inventory		[−0.66]		[4.42]
Busy		−0.425***		0.051***
Busy		[−6.19]		[2.73]
Auditor change		0.027		−0.289***
Auditor change		[0.35]		[−15.35]
Debt		−0.005		0.037***
Debt		[−0.40]		[13.87]
Unqualified opinion		0.008		−0.102***
Unqualified opinion		[0.15]		[−9.03]
Major exchange		−0.237***		0.025
Major exchange		[−2.79]		[1.17]
Restatement		3.256***		0.055***
Restatement		[48.51]		[3.80]
Internal control weakness		1.110***		0.153***
Internal control weakness		[15.38]		[8.42]
Auditor tenure		−0.008		0.000
Auditor tenure		[−0.91]		[0.10]
The net tone in 10K		−15.884**		−15.853***
The net tone in 10K		[−2.27]		[−9.08]
Constant	−1.722***	−2.790***	13.478***	10.434***
Constant	[−4.77]	[−6.59]	[256.11]	[238.10]
Year FE	YES	YES	YES	YES
Industry FE	YES	YES	YES	YES
Observations	25,933	25,933	25,933	25,933
Pseudo/Adjusted R²	0.045	0.251	0.272	0.853

Note(s): This table shows multiple regression results for the relationship between flight delay and audit quality and effort. We measure the audit quality as the restatement which equals one if the firm’s 10-K is subsequently restated, and zero otherwise. In terms of audit effort, we use the total audit fees. For columns (1) and (3), we only add fixed effects to determine the base relationship between flight delay and each dependent variable. We add control variables, which are described in the Appendix, in columns (2) and (4). Standard errors are clustered by firm and t-statistics are shown in parentheses. Significance level: ***p < 0.01, **p < 0.05, p < 0.1

Source(s): Table by authors

[ViewLarge]

Sharing Unavailable