We investigate how investors perceive audit report lag. We argue that the cost of equity will be lower (higher) if a long audit report lag links positively to confidence (scepticism) among investors about the credibility of reported earnings. We find that the audit report lag is positively associated with the cost of equity. In the additional analyses, we report that the audit committee's effective monitoring, Big N auditors and industry-expert auditors moderate the positive association between audit report lag and the cost of equity. Lastly, the short window return-earnings association test suggests that investors perceive that long audit report lag reflects less credible financial reporting quality. In summary, our findings provide implications to the client firms, the practitioners and the regulators by showing that the firm's cost of raising equity capital is positively associated with the audit report lag.

中文翻译：

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投资者如何看待审计报告滞后？来自股权成本的证据

我们调查了投资者如何看待审计报告滞后。我们认为，如果长时间的审计报告滞后与投资者对报告收益的可信度的信心（怀疑）正相关，那么股权成本将会更低（更高）。我们发现审计报告滞后与股权成本呈正相关。在额外的分析中，我们报告审计委员会的有效监督、Big N 审计师和行业专家审计师缓和了审计报告滞后与股权成本之间的正相关关系。最后，短窗口回报收益关联测试表明，投资者认为审计报告滞后时间长反映财务报告质量可信度较低。总而言之，我们的研究结果通过表明公司“