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The informative value of Key Audit Matters in the audit report

Author

Listed:
  • Nicolás Gambetta

    (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Finanzas)

  • Laura Sierra García

    (Universidad Pablo de Olavide)

  • María Antonia García Benau

    (Universidad de Valencia)

  • Josefina Novejarque Civera

    (ESIC Business & Marketing School)

Abstract

This paper examines whether the readability (and hence informative value) of Key Audit Matters (KAM) varies according to the audit firm and the KAM type disclosed, thus providing stakeholders with different information quality for effective decision making. Our analysis shows that the informative value of published descriptions of KAM matter and KAM audit procedures varies according to the audit firm responsible. This informative value also depends on whether the KAM concerns entity-level or accounting-level risks. This study contributes to stakeholder theory and to the literature on audit report quality by showing how the characteristics of the audit firm and the type/content of KAM presented impact on the informative value of the expanded audit report. Furthermore, we suggest that audit firms may increase or decrease the informative value of the audit report according to the type of KAM disclosure made.

Suggested Citation

  • Nicolás Gambetta & Laura Sierra García & María Antonia García Benau & Josefina Novejarque Civera, 2022. "The informative value of Key Audit Matters in the audit report," Documentos de Investigación 129, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    • Handle: RePEc:avs:wpaper:129
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    References listed on IDEAS

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    More about this item

    Keywords

    audit quality; audit expectation gap; audit report; key audit matter; readability;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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