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Analysis of non-English key audit matters: Do key audit matters influence investor sentiment?

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  • Kitiwong, Weerapong
  • Ekasingh, Erboon
  • Sarapaivanich, Naruanard

Abstract

This study extends our understanding of the association between key audit matter (KAM) disclosures and investor sentiment in Thailand, an advanced emerging market. Thailand is characterized by a culture of high secrecy, strong uncertainty avoidance, and strong societal trust. The primary aim of this study is to analyze the local language versions of auditors’ reports, as they may differ from English-translated versions due to cultural and linguistic variations. To achieve this, we compiled a bag of Thai words to analyze the content of KAM sections in 334 publicly listed Thai companies during the period 2016–2017. We found that investor sentiment responds marginally to only three categories of KAMs and neutral words within KAM sections. However, investors do not react to the number of KAMs or to words associated with negativity, positivity, litigation, or uncertainty. These results suggest that KAM disclosures hold limited information value for investors. Regulators and standard setters successfully educated investors and other stakeholders about KAM disclosures before their implementation. However, in a high-secrecy environment, the use of neutral language in KAM sections triggers investor skepticism, leading to stock price discounts.

Suggested Citation

  • Kitiwong, Weerapong & Ekasingh, Erboon & Sarapaivanich, Naruanard, 2025. "Analysis of non-English key audit matters: Do key audit matters influence investor sentiment?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 58(C).
    • Handle: RePEc:eee:jiaata:v:58:y:2025:i:c:s1061951824000764
    DOI: 10.1016/j.intaccaudtax.2024.100670
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    More about this item

    Keywords

    Audit report; Key audit matters; Informative value; Investor reaction; Investor sentiment; Thailand;
    All these keywords.

    JEL classification:

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

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