SUMMARY
We investigate the effect of the 2019 Coronavirus pandemic (COVID-19) on audit fees and filing delays following the pandemic’s onset. Employing location-specific stay-at-home (S@H) mandates to proxy for COVID’s disrupting effects on audits, we fail to find evidence of a change in audit fees in response to initial S@H mandates. However, S@H mandates are associated with an increase in filing delays. We drill down to explore two mechanisms underlying the effect of COVID-19 on filing delays: increased risk of material misstatement and difficulties in audit team coordination. We find that S@H mandates increase filing delays to a greater extent for engagements with high misstatement risk and engagements with high coordination challenges. Our findings are important for understanding the pandemic’s effect on audits and have implications for future audits in regard to audit team coordination.
Data Availability: Data are available from the public sources cited in the text.
JEL Classifications: M40; M41; M42.
