Abstract: In this paper, we examine the relationship between flight delays and auditing quality. To proxy for the auditor’s mood changes, we use the auditors’ flight delay experience between client’s location and auditor’s office during auditing period. Our analysis reveals that the auditor’s negative mood induced by flight delays increases the auditing quality and auditors’ effort by decreasing the chance of future accounting restatements and increasing audit fees. Further, using the weather condition around departure airport as an instrument for the flight delay, we confirm the causal link between negative moods induced by flight delays and auditing outcomes by implement a 2SLS model. The positive relation between flight delays and auditing quality is also robust in various conditions: more restricted fixed effects, falsification tests, and alternative measurements for flight delays.
Download Link: Send Email to Request