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‘Standard KAMs’, ‘Canary KAMs’, and ‘Naughty KAMs’: A Typology of Key Audit Matters to Explain Their Value Relevance

Author

Listed:
  • Warren Maroun
  • Alan Duboisée De Ricquebourg
  • Dusan Ecim

Abstract

This paper develops a framework for understanding how key audit matters (KAMs) can be factored into investors’ risk assessments. Detailed interviews with seasoned investors representing international and regional asset managers and owners confirm that the number and type of reported KAMs are not ‘priced’ directly. Nevertheless, KAMs can be a source of unbiased and complementary information for understanding the likelihood and impact of risks that affect an organization's financial position and performance. The paper responds to calls for more interpretive work on financial statement audits with a specific focus on an overlooked but key user of audit reports. Unlike earlier work based on inferential testing of archival data and experiments using proxies for financial capital providers, this study is the first primary account of how KAMs are understood and applied by investors. Findings are based on a relatively small sample of informed investors. Other stakeholders are not engaged. Nevertheless, the proposed framework makes an important contribution by outlining an alternative risk classification schematic that can be used by investors and other users of financial statements. The study bridges the technical assurance and risk management literature while providing empirical evidence that will widen the risk analysis and classification field.

Suggested Citation

  • Warren Maroun & Alan Duboisée De Ricquebourg & Dusan Ecim, 2026. "‘Standard KAMs’, ‘Canary KAMs’, and ‘Naughty KAMs’: A Typology of Key Audit Matters to Explain Their Value Relevance," Abacus, Accounting Foundation, University of Sydney, vol. 62(2), pages 392-421, June.
    • Handle: RePEc:bla:abacus:v:62:y:2026:i:2:p:392-421
    DOI: 10.1111/abac.70000
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    References listed on IDEAS

    as
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