Audit scope: disclosure practice and implications on audit pricing and audit delay

Sammanfattning: Using a sample of FTSE 100 firms spanning from 2019 to 2022, this study documents auditors' audit scope disclosure in practice after the introduction of revised auditing standards related to auditors' report in the UK. We provide evidence on actual disclosure of audit components and audit coverage benchmarks used. We further investigate variations in audit scope practices across different audit firms and industries and find that audit scope disclosure is generally compliant with auditing standards, however, auditors also apply their discretion when it comes to benchmark choice and extent of disclosure. Additionally, our regression analyses examine the implications of audit scope on audit process, proxied by audit fee and audit delay. The results show that the coverage of revenue achieved by auditors represents the level of audit complexity to some extent and has a significant negative association with both audit fee and audit delay. Collectively, our study for the first time reveals disclosure practice of audit scope and the relationship between audit scope and audit process.