Does Mandatory IFRS Adoption Affect Audit Hours and the Effectiveness to Constrain Earnings Management? Evidence from Italy

What is it about?

While several published studies have explored how IFRS adoption affects audit fees, no study has investigated how the IFRS adoption affects audit hours (effort) and whether the greater effort results in better audit quality. Our study examines whether and how the IFRS adoption in Italy affects how audits are conducted. Our results show that the IFRS adoption leads to more audit hours and the greater hours do not seem to result in expected better audit quality in the IFRS period. We contribute to the literature of IFRS, audit quality and financial reporting quality.

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