Information technology investment and the timeliness of financial reports
Abstract
Information technology (IT) can be harnessed to improve the efficiency of the production of financial reports and the efficiency of the audits of these reports. Using firm-level IT data of U.S. companies, we show that IT intensity, measured as IT assets scaled by total assets, is negatively related to both earnings report lag and audit report lag. Further, we find that this negative relation is stronger for firms in industries that are likely to have an automate or informate strategic role in IT. We do not find any evidence suggesting that IT intensity reduces the gap between the earnings report date and the audit report date. These results are consistent with the argument that investing in IT reduces reporting lag by automating and simplifying the financial reporting and closing process. Our findings have implications for practitioners and IT executives in assessing the costs and benefits of IT applications.
Publication Title
Journal of Emerging Technologies in Accounting
Recommended Citation
Johnston, J., & Zhang, J. (2018). Information technology investment and the timeliness of financial reports. Journal of Emerging Technologies in Accounting, 15 (1), 77-101. https://doi.org/10.2308/jeta-52066
