The Corona Virus Disease pandemic has
significant adverse effects on the economy, health, and society that have
hampered global economic growth. Taiwan is one of the countries impacted by
this pandemic. The pandemic had an enormous influence on the world economy,
making the role of financial report quality an even more critical issue. This
study aims to examine and evaluate the impact of the COVID-19 pandemic on the
quality of financial reports. Additionally, it intends to examine and evaluate
the differences between the impact of audit opinion and audit quality on the
quality of financial reports before and after the COVID-19 pandemic. This study
adopts secondary data, i.e., annual financial reports and audit quality data of
public listing firms on the Taiwan Stock Exchange (TSE). Furthermore, this
study selected data from 2016 to 2021. This study proves that the COVID-19
pandemic affects the quality of financial reports. Furthermore, this study
suggests that the COVID-19 pandemic strengthens the negative impacts of audit
opinion on the quality of financial reports using accrual earnings management proxies.
However, it also shows that the audit quality did not impact the quality of
financial reports proxied by accrual and real earnings management at the
beginning of the COVID-19 outbreak.
JEL classification numbers: G32, M41, O06, Q56.
Keywords: The Quality of Financial Reports, COVID-19 Pandemic, Audit
Opinion, Audit Quality.