Phase 2: Research Introduction, Comprehensive Literature Review and Theoretical Framework Development

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Part 1: Understanding the Auditing Issue

Artificial Intelligence (AI) has become a prominent innovation within the domain of auditing as the use of technology by audit organizations and their respective clients to handle financial data, detect unusual activities, analyze risks, and facilitate the audit process has become more popular. To me, it became an interesting topic to explore as AI can affect the manner in which evidence is collected, risk analysis is conducted, and professional judgment is used in the auditing process. Although AI can bring improvements in the speed and extent of the audit process, there might be some problems associated with data accuracy, over-reliance on AI, and data interpretation.

The issue is relevant because the quality of the audit depends on the auditor's ability to identify material misstatements and acquire audit evidence. Recent research indicates that the power of AI investing may help increase the efficiency of audit performance. According to Fedyk et al. (2022), the audit firms that invest more in AI tend to pay lower audit fees and face fewer restatements. This pattern is confirmed by Rahman et al. (2024), who also state that when both audit firms and clients use AI, the duration of the audit report lag becomes shorter, and the possibility of restatement of financial statements decreases.

Part 2: Research Objectives

The primary objective of this research is to investigate the link between the use of AI and audit quality and audit efficiency. In particular, this research will focus on how the use of AI affects audit report lags, audit fees, and financial reporting quality. Second, to identify if there is an influence of auditor and client characteristics on the relationship between the use of AI and the audit outcomes. This research may provide empirical evidence for auditors, regulators, investors, and corporate governance organizations regarding the impact of AI on auditing.

Research Question 1

RQ1: Does an auditor change affect the likelihood of a non-timely SEC filing among U.S. public companies?

H1: Auditor changes are positively associated with the likelihood of a non-timely SEC filing.

H0₁: Auditor changes are not associated with the likelihood of a non-timely SEC filing.

Research Question 2

RQ2: Does auditor tenure affect the likelihood of a non-timely SEC filing among U.S. public companies?

H2: Longer auditor tenure is negatively associated with the likelihood of a non-timely SEC filing.

H0₂: Auditor tenure is not associated with the likelihood of a non-timely SEC filing.

Research Question 3

RQ3: Does PCAOB auditor registration moderate the relationship between auditor changes and the likelihood of a non-timely SEC filing?

H3: PCAOB auditor registration moderates the relationship between auditor changes and the likelihood of a non-timely SEC filing.

H0₃: PCAOB auditor registration does not moderate the relationship between auditor changes and the likelihood of a non-timely SEC filing.

Part 4: Preliminary Literature Review

The effects of AI on the quality, efficiency, and decision-making process of auditors are an area of concern in current auditing literature. Fedyk et al. (2022) offer valuable empirical evidence suggesting that the use of AI by auditing firms leads to fewer restatements and reduced audit fees. The results of the study show that AI can improve the process of auditing and reduce some costs associated with auditing.

Liao et al. (2024) investigate the background of auditors regarding their AI education and find that those auditors who have had AI education experience less delay in preparing audit reports. The results imply that the benefits of AI depend not only on the use of AI technology but also on auditors' ability to understand and work with it. Rahman et al. (2024) continue the trend in their investigation of AI adoption by auditing firms and their clients. They found a connection between the joint use of AI and financial statement restatements and fewer audit report delays.

Recent studies also consider the impact of the implementation of AI on firms from an economic perspective. Lai (2025) finds that there is a positive relationship between audit fees and AI adoption because of AI's capacity to reduce information asymmetry and improve the quality of accounting information. However, there are concerns about the reliability, transparency, bias, privacy, and the over-reliance of auditors on AI usage. All this proves that technology cannot solve the problems of improving audit quality.

The appropriate theoretical framework for this problem is agency theory. It uses outside auditors to eliminate the information asymmetry between managers and shareholders. AI can improve the role of auditing as a monitoring device.

While earlier research considered the results of audits, such as audit fees, audit report lag, and restatements, the examination of multiple audit results in one empirical paper, along with the consideration of auditor and client characteristics, has not been done yet. This paper provides an opportunity to fill this gap by studying the effect of AI implementation on audit quality and efficiency.

Part 5: Research Title: Auditor Tenure and Audit Report Lag: Evidence from Public Companies

Problem Addressed. The study examines whether auditor tenure and auditor changes influence audit reporting timeliness among U.S. public companies. Prior research reports mixed evidence on the relationship between auditor tenure, auditor switching, and audit report lag. However, limited research examines these factors in relation to the likelihood of a non-timely SEC filing while considering PCAOB auditor registration as a moderating factor. The study therefore addresses a specific auditing problem involving engagement continuity, audit completion, and timely regulatory reporting.

Stakeholders. The study provides relevant evidence for external auditors, audit committees, investors, the SEC, and the PCAOB. Auditors and audit committees can use the findings to assess whether auditor changes or longer auditor-client relationships create reporting-timeliness considerations. Regulators can use the evidence to evaluate factors associated with delayed SEC filings. Investors can gain additional information about conditions associated with delays in receiving audited financial information.

Regulatory Relevance. The title reflects audit report timeliness within the U.S. public-company reporting environment. The study connects audit tenure and auditor changes to SEC filing timeliness and incorporates PCAOB auditor registration into the empirical model. This regulatory context makes the study relevant to the oversight of public-company audits and timely financial reporting.

Theory Fit. Agency theory provides the primary theoretical foundation. The theory supports examination of the auditor's monitoring role in reducing information asymmetry between managers and external stakeholders. Auditor tenure may affect auditor knowledge and monitoring effectiveness, while auditor changes may disrupt engagement continuity. PCAOB registration introduces a regulatory condition that may alter the relationship between auditor changes and filing timeliness.

Auditor Tenure and Audit Report Lag: Evidence from Public Companies

Timely audited financial reporting represents an important component of the U.S. public-company reporting environment. Investors, audit committees, regulators, and other capital-market participants depend on timely financial information when evaluating corporate performance and making economic decisions. Delays in completing the audit process can contribute to delayed financial reporting and, in some circumstances, non-timely SEC filings. Understanding factors associated with audit reporting timeliness therefore remains an important issue in auditing research and practice.

Auditor tenure and auditor changes represent two characteristics that may influence the timeliness of the audit process. Longer auditor-client relationships can provide auditors with greater knowledge of the client's operations, accounting systems, and risk profile. This accumulated knowledge may improve audit efficiency and reduce the time required to complete audit procedures. Conversely, extended auditor tenure can raise concerns regarding auditor independence and familiarity. Auditor changes may also introduce additional time requirements because successor auditors must develop knowledge of the client, assess opening balances, understand internal controls, and evaluate previously established audit procedures.

Prior empirical research provides mixed evidence regarding the relationship between auditor tenure, auditor switching, and audit report lag. The literature reviewed for this study includes evidence from 1999 through 2026 and examines auditor tenure, auditor switching, audit report lag, audit quality, auditor characteristics, and financial reporting outcomes across different institutional settings. Several studies report relationships between auditor tenure and audit timeliness, while others report insignificant associations. Research also identifies auditor changes as a potential determinant of reporting delay. However, much of this literature uses audit report lag as a continuous measure rather than examining whether the company ultimately fails to meet an SEC filing deadline.

This distinction creates an important research opportunity. Audit report lag and a non-timely SEC filing represent related but distinct outcomes. Audit report lag measures the period between the fiscal year-end and the audit report date, whereas a non-timely SEC filing captures whether the company fails to submit its required filing within the applicable regulatory deadline. Consequently, evidence concerning audit report lag does not fully establish whether auditor characteristics affect the probability of a regulatory filing delay.

The proposed study addresses this issue by examining whether auditor changes and auditor tenure affect the likelihood of a non-timely SEC filing among U.S. public companies. It further examines whether PCAOB auditor registration moderates the relationship between auditor changes and non-timely SEC filings. This integrated approach extends existing auditing research by connecting auditor characteristics to a regulatory filing-timeliness outcome.

The literature reviewed identifies several established research streams concerning auditor tenure, auditor switching, audit quality, and audit report lag. Wiedjaja and Eriandani (2021), for example, examine auditor characteristics and audit report lag and report that longer tenure can influence the relationship between workload and reporting timeliness. Other studies report mixed findings regarding audit tenure and audit delay. Wiyarni and Bunyamin (2021) examine audit tenure and auditor switching in relation to audit delay, while Azizkhani et al. (2021) examine mandatory partner rotation and audit timeliness. Research also considers auditor tenure in relation to audit quality, information asymmetry, financial reporting quality, investor perceptions, and auditor efficiency.

The literature therefore establishes that auditor tenure and auditor changes constitute relevant auditing characteristics. However, the findings remain inconsistent across settings and dependent variables. More importantly, the reviewed literature provides limited integrated evidence concerning auditor change, auditor tenure, and the probability of a non-timely SEC filing within the U.S. public-company environment.

The proposed research addresses this gap in three ways. First, it examines auditor change as a determinant of the likelihood of a non-timely SEC filing rather than relying exclusively on continuous audit report lag measures. Second, it examines whether auditor tenure affects the same regulatory reporting outcome. Third, it investigates whether PCAOB auditor registration moderates the relationship between auditor changes and filing timeliness. The resulting research gap can therefore be stated as follows: existing auditing research provides mixed evidence concerning auditor tenure, auditor switching, and audit reporting delay, but limited research integrates these auditor characteristics with the likelihood of a non-timely SEC filing while examining PCAOB auditor registration as a moderating regulatory factor.

The primary objective of this study is to examine whether auditor changes and auditor tenure influence the likelihood of non-timely SEC filings among U.S. public companies. The study also evaluates whether PCAOB auditor registration changes the relationship between auditor changes and filing timeliness. The study seeks to contribute to auditing knowledge by connecting auditor-client relationship characteristics with a regulatory reporting outcome. Rather than treating audit delay solely as an elapsed number of days, the study examines whether audit engagement characteristics are associated with failure to meet the applicable SEC filing deadline.

The study addresses three quantitative research questions. RQ1 asks: Does an auditor change affect the likelihood of a non-timely SEC filing among U.S. public companies? H1 predicts that auditor changes are positively associated with the likelihood of a non-timely SEC filing, while H0₁ predicts that auditor changes are not associated with the likelihood of a non-timely SEC filing. RQ2 asks: Does auditor tenure affect the likelihood of a non-timely SEC filing among U.S. public companies? H2 predicts that longer auditor tenure is negatively associated with the likelihood of a non-timely SEC filing, while H0₂ predicts that auditor tenure is not associated with the likelihood of a non-timely SEC filing. RQ3 asks: Does PCAOB auditor registration moderate the relationship between auditor changes and the likelihood of a non-timely SEC filing? H3 predicts that PCAOB auditor registration moderates the relationship between auditor changes and the likelihood of a non-timely SEC filing, while H0₃ predicts that PCAOB auditor registration does not moderate this relationship.

Agency theory provides the primary theoretical foundation for the study. The separation of ownership and management creates information asymmetry between corporate managers and external stakeholders. External auditing provides an important monitoring mechanism because auditors independently examine financial statements and provide assurance concerning the reliability of reported financial information.

Auditor tenure can affect this monitoring relationship through accumulated client knowledge. Longer auditor-client relationships may provide auditors with greater understanding of the client's accounting systems, business operations, and financial reporting risks. Such knowledge may facilitate audit completion and reduce the probability of delayed filing. At the same time, extended relationships can create concerns concerning familiarity and auditor independence. These competing mechanisms provide a theoretical basis for examining the empirical association between tenure and filing timeliness rather than assuming that tenure necessarily produces one outcome.

Auditor changes represent a different agency-theory mechanism. When an audit firm changes, the successor auditor must establish knowledge of the client and evaluate the financial reporting environment. This transition may increase engagement demands and potentially affect reporting timeliness. The proposed study therefore examines whether auditor changes correspond with a greater probability of non-timely SEC filing.

PCAOB auditor registration introduces a regulatory dimension to this agency relationship. The proposed moderation analysis examines whether the relationship between auditor change and filing timeliness differs according to PCAOB registration status.

The proposed study uses a quantitative research design based on public-company data covering the period from 1999 through 2026. The empirical setting consists of U.S. public companies subject to SEC filing requirements. The study focuses on whether auditor characteristics are statistically associated with the probability of a non-timely SEC filing.

The dependent variable, non-timely SEC filing, will represent the filing-timeliness outcome specified in the research questions. The primary independent variables are auditor change and auditor tenure. Auditor change captures whether the company changes its auditor, while auditor tenure captures the duration of the auditor-client relationship. PCAOB auditor registration represents the regulatory variable used to test the moderating relationship specified in RQ3.

The primary empirical analysis will use logistic regression because the principal dependent variable represents the likelihood of a non-timely filing. The analysis will estimate the association between auditor change and filing timeliness in RQ1 and between auditor tenure and filing timeliness in RQ2. For RQ3, an interaction between auditor change and PCAOB auditor registration will test whether PCAOB registration moderates the auditor-change relationship. The empirical models will be evaluated using statistical significance and coefficient direction consistent with the stated hypotheses. The analysis will also consider appropriate firm-level and audit-related characteristics available in the collected data to reduce the possibility that the observed relationships reflect differences in company characteristics rather than auditor-related factors.

The study has direct relevance to the U.S. public-company auditing environment because it examines filing timeliness within the SEC regulatory framework. Timely filing allows investors and other users of financial statements to obtain audited information within the required reporting period. Identifying auditor-related characteristics associated with non-timely filings can therefore provide evidence relevant to audit engagement planning and regulatory oversight.

For external auditors, the findings may provide evidence concerning whether auditor transitions and auditor-client tenure relate to filing-timeliness risk. Audit firms may use such evidence when evaluating engagement transitions and planning audit resources. For audit committees, the findings may provide information relevant to auditor selection, auditor transitions, and oversight of the financial reporting process. The evidence may also assist audit committees in considering the potential reporting-timeliness implications of auditor changes.

For the SEC and PCAOB, the study provides empirical evidence concerning auditor characteristics and timely public-company reporting. The PCAOB dimension is particularly relevant because the study examines whether registration status conditions the association between auditor change and non-timely filing. For investors, the study addresses a reporting characteristic that affects the timeliness with which audited financial information becomes available. Non-timely filings can delay access to information used in investment and monitoring decisions.

The study is expected to make theoretical and practical contributions to auditing research. The primary theoretical contribution involves extending agency theory research on external monitoring by examining whether auditor-client relationship characteristics correspond with the probability of a regulatory filing delay. The study moves beyond conventional audit report lag measures by examining a filing-timeliness outcome with direct regulatory significance.

The study also contributes to the literature by bringing auditor change and auditor tenure into a common empirical framework. Existing research frequently examines these characteristics separately or focuses on audit quality, audit delay, and financial reporting outcomes. The proposed study instead evaluates their relationship with non-timely SEC filings among U.S. public companies.

A further contribution concerns the regulatory role of PCAOB registration. By testing an interaction between auditor change and PCAOB registration, the study evaluates whether the regulatory status of the auditor is associated with differences in the relationship between auditor transition and filing timeliness. This analysis adds a regulatory dimension to research on auditor changes and audit reporting.

The significance of the proposed study rests on its integration of auditor tenure, auditor changes, regulatory filing timeliness, and PCAOB registration within one quantitative auditing framework. The literature reviewed from 1999 through 2026 demonstrates sustained academic interest in audit report lag, auditor tenure, auditor switching, audit quality, and related auditor characteristics. Nevertheless, mixed findings remain regarding the effect of tenure and auditor changes on audit timeliness.

The proposed study addresses this unresolved issue using a U.S. public-company setting and a regulatory filing outcome. This approach provides a direct connection between auditor characteristics and the timely availability of audited financial information. The study also recognizes that auditor tenure can generate both efficiency and independence considerations, while auditor changes can introduce transition-related engagement demands.

By examining these relationships empirically and incorporating PCAOB auditor registration into the analysis, the study provides evidence that can extend existing research on audit timeliness and auditor-client relationships. The findings can inform auditors, audit committees, investors, and U.S. audit regulators regarding factors associated with non-timely SEC filings. The study therefore provides a focused quantitative framework for examining how auditor-client relationships and regulatory conditions relate to timely public-company financial reporting.

Auditor Tenure and Audit Report Lag: Evidence from Public Companies

Problem: Timely financial reporting remains an important auditing concern because delays can restrict investors' access to audited financial information and result in non-timely SEC filings. Prior research reports mixed findings regarding auditor tenure, auditor changes, and audit report lag. Limited evidence integrates these auditor characteristics with the likelihood of non-timely SEC filings among U.S. public companies or examines PCAOB auditor registration as a moderating regulatory factor.

Objective: This study examines whether auditor changes and auditor tenure affect the likelihood of non-timely SEC filings among U.S. public companies. It also examines whether PCAOB auditor registration moderates the relationship between auditor changes and filing timeliness. Agency theory provides the theoretical foundation by linking auditor monitoring, information asymmetry, and auditor-client relationships.

Research Questions: RQ1 asks whether auditor changes affect the likelihood of non-timely SEC filings. H1 predicts a positive association. RQ2 asks whether auditor tenure affects the likelihood of non-timely SEC filings. H2 predicts a negative association between longer tenure and non-timely filings. RQ3 asks whether PCAOB auditor registration moderates the relationship between auditor changes and non-timely filings. H3 predicts a moderating effect.

Methodology: The study uses quantitative data from U.S. public companies covering 1999–2026. Logistic regression will estimate the likelihood of non-timely SEC filings. Auditor change and auditor tenure serve as primary independent variables, while PCAOB auditor registration and its interaction with auditor change test the moderation hypothesis. Appropriate firm and audit characteristics will be incorporated as controls where available.

Expected Outcomes: The study is expected to extend auditing research by connecting auditor tenure and auditor changes with regulatory filing timeliness. Findings may provide evidence relevant to auditors, audit committees, investors, the SEC, and PCAOB concerning auditor-related factors associated with non-timely public-company filings.

References

Fedyk, A., Hodson, J., Khimich, N., & Fedyk, T. (2022). Is artificial intelligence improving the audit process? A. Fedyk et al.  Review of accounting studies,  27(3), 938-985. https://doi.org/10.1007/s11142-022-09697-x

Lai, J. (2025). Artificial intelligence applications and audit fees: An empirical study.  International Review of Economics & Finance, 104421. https://doi.org/10.1016/j.iref.2025.104421

Liao, F. N., Zhang, C., Zhang, J. J., Yan, X., & Chen, T. X. (2024). Hyperbole or reality? The effect of auditors' AI education on audit report timeliness.  International Review of Financial Analysis,  91, 103050. https://doi.org/10.1016/j.irfa.2023.103050

Rahman, M. J., Zhu, H., & Yue, L. (2024). Does the adoption of artificial intelligence by audit firms and their clients affect audit quality and efficiency? Evidence from China.  Managerial Auditing Journal,  39(6), 668-699. DOI: 10.1016/j.irfa.2023.103050