Does voluntary non-financial reporting matter for the evaluation of audit risk after a crisis period? Perceptions from Italian auditors

Purpose - This paper aims to investigate the effect of voluntary non-financial reporting on the evaluation of audit risk from the auditors’ viewpoint in a post-crisis period. Furthermore, this paper analyses whether auditors perceive that voluntary non-financial reporting impacts audit risk differently for old clients as compared with new clients. Design/methodology/approach - This study is conducted on a sample of Italian audit firms through a paper-based questionnaire. Both Big4 and non-Big4 audit firms have been included in the sample. Findings - Results show that integrated reporting is perceived to be the most relevant reporting method and intellectual capital statement the least relevant. Surprisingly, empirical findings over the sample period show that auditors do not perceive statistically significant differences between old and new clients. Practical implications - Auditors can identify opportunities to adapt their assessment model to include voluntary non-financial report information. Moreover, they can use different assessment models regarding the research variables in the case of new and old clients. Originality/value - Empirical findings highlight the growing role of voluntary non-financial reporting in the auditors’ perception of their client’s audit risk. All the observed voluntary non-financial reporting forms, except for intellectual capital, are considered as relevant by auditors in the evaluation of their client’s audit risk when compared to an indifference point. In addition, findings reveal that female auditors perceive a reduced gap in the relevance between integrated reports and intellectual capital reports compared to their counterparts.