The informational relevance of key audit matters

Júnior, Edilson Divino Alves; Galdi, Fernando Caio

doi:10.1590/1808-057x201908910

Cited by 14 publications

(14 citation statements)

References 32 publications

(37 reference statements)

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“…In Brazil, this responsibility is attributed to the CFC, which has altered various NBC TA, including NBC TA 701, which concerns KAMs and established that the auditor was responsible for reporting them in their report covering the financial statements (Alves & Galdi, 2020;Santos et al, 2020). Thus, events and situations that have required greater attention from the auditor, and that are potentially useful for the user, should be disclosed in order to improve the assessment and reliability of the financial statements and the risks associated with the performance of these companies (Ferreira & Morais, 2020).…”

Section: Why Disclose a Kam?mentioning

confidence: 99%

Section: Previous Evidence and Development Of The Hypothesesmentioning

confidence: 99%

“…From another perspective, studies such as those of Alves and Galdi (2020), In et al (2020), Reid et al (2019), andSantos et al (2020) have sought to analyze the empirical implications of KAMs for the capital market. Alves and Galdi (2020) observed that there is a positive association between the adoption of NBC TA 701 and share price behavior. In turn, In et al (2020), Reid et al (2019), andSantos et al (2020) presented initial evidence that the adoption of the standard has worked to discourage earnings management practices.…”

Section: Previous Evidence and Development Of The Hypothesesmentioning

confidence: 99%

“…In line with the previous literature (Alves & Galdi, 2020;Ferreira & Morais, 2020;Pinto et al, 2020;Santos et al, 2020;Velte, 2018Velte, , 2019, we sought to control the effect of characteristics of the firms analyzed. As highlighted by Pinto et al (2020), the length of the text (LengthT it ), measured by the logarithm of the total words in the IAR, seeks to control the effect of inserting words in the report.…”

Section: Control Variablesmentioning

confidence: 99%

“…In light of the change in the IAR and the need to understand its empirical implications, the previous literature has sought to: (i) identify the KAMs reported and their association with company characteristics (Abdullatif & Al-Rahahleh, 2020;Ferreira & Morais, 2020;Kend & Nguyen, 2020); (ii) analyze the effects of adoption on the fees, litigation risk, and quality of the audit (Gold et al, 2020;Kitiwong & Sarapaivanich, 2020); (iii) analyze the effect of KAMs over the decision making of investors and other users (Coram & Wang, 2020;Moroney et al, 2020;Sirois et al, 2018;Vinson et al, 2018); (iv) verify the association between KAMs and the market value of companies (Alves & Galdi, 2020); (v) analyze the effect of the adoption of NBC TA 701 over the quality of the financial information reported (In et al, 2020;Reid et al, 2019;Santos et al, 2020); and (vi) analyze the effect of the adoption of NBC TA 701 over the readability of IARs (Pinto et al, 2020;Velte, 2018Velte, , 2019.…”

Section: Introductionmentioning

confidence: 99%

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Has it become more readable? Empirical evidence of key matters in independent audit reports,

Marques

Pereira

Aquino

et al. 2021

Rev. contab. finanç.

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The aim of this study was to analyze the effect of the adoption of Brazilian Accounting Standard - Auditing Technique 701 (NBC TA 701, in its Portuguese initialism) over the readability of audit reports. The study fills a gap in the literature by obtaining empirical evidence regarding the effect of NBC TA 701 on the readability and comprehensibility of audit reports. The study is important for verifying whether the disclosure of key audit matters (KAMs) improves the ease of reading and understanding audit reports after the adoption of NBC TA 701. Unlike in the previous literature, it was observed that the effect of KAMs has a non-linear, U-shaped relationship, which suggests additional benefits to readability based on a certain quantity of key matters reported. The data from a sample of 240 listed companies on the B3 S.A. -Brasil,Bolsa,Balcão (B3), in the period from 2013 to 2018, were assessed using content analysis, descriptive statistics, difference of means tests, and panel data correlation and regression analyses. The results showed that the adoption of NBC TA 701 significantly affected the Flesch readability index (FRI) of the independent audit reports. They also confirmed that the quantity of KAMs reported increases the FRI in a non-linear way, and that the types of key matters affect readability differently according to their complexity. The results provide evidence that the new audit report improves the level of readability in a non-linear way, thus contributing to the informational content of the audit report used by the various users for decision making.

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Section: Why Disclose a Kam?mentioning

confidence: 99%

Section: Previous Evidence and Development Of The Hypothesesmentioning

confidence: 99%

Section: Previous Evidence and Development Of The Hypothesesmentioning

confidence: 99%

Section: Control Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Has it become more readable? Empirical evidence of key matters in independent audit reports,

Marques

Pereira

Aquino

et al. 2021

Rev. contab. finanç.

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Mapping the state of expanded audit reporting: a bibliometric view

Mashayekhi

Dolatzarei

Faraji

et al. 2023

MEDAR

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Purpose This study aims to identify the intellectual structure of expanded audit reporting (EAR), offers a quantitative summation of prominent themes, contributors and knowledge gaps and provides suggestions for further research. Design/methodology/approach This research uses various bibliometric techniques, including co-word and co-citation analysis for EAR science mapping, based on 123 papers from Scopus Database between 1991 and 2022. Findings The results show EAR research is focused on Audit Quality; Auditor Liability and Litigation; Communicative Value and Readability; Audit Fees; and Disclosure. Regarding EAR research, Brasel et al. (2016), article is the most cited paper, Bédard J. is the most cited author, Laval University is the most influential university, The Accounting Review is the most cited journal and USA is the leading country. Furthermore, the results show that in common law countries, in which shareholder rights and litigation risk is high, topics such as disclosure quality and audit litigation have been addressed more; and in civil legal system countries, which usually favor stakeholders’ rights, topics of gender diversity or corporate governance have been more studied. Practical implications This research has practical implications for standard setters and regulators, who can identify important, overlooked and emerging issues and consider them in future policies and standards. Originality/value This paper contributes to the literature by providing a more objective and comprehensive status of the accounting research on EAR, identifying the gaps in the literature and proposing a direction for future research to continue the discussion on the value-relevance of EAR to achieve more transparency and less audit expectation gap.

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Auditoria de estimativas complexas: uma análise da percepção e desafios enfrentados pelos auditores

Francisco

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No final de 2019, eu larguei minha carreira de nove anos como auditor, para seguir um novo caminho profissional. Quem é próximo de mim, sabe o quanto me dediquei e batalhei para poder conseguir alcançar o meu objetivo, que era ingressar no programa de Mestrado em Controladoria e Contabilidade da FEA-USP, um dos melhores (se não, o melhor) do país.Primeiramente, gostaria de agradecer ao meu pai e minha mãe. Eu amo muito vocês e sou extremamente grato por tudo que fizeram por mim. Obrigado pela educação de qualidade que me proporcionaram e por terem me apoiado em cada situação desafiadora que passei ao longo dos anos. Saibam que todas as minhas conquistas também são suas. Muito, muito obrigado mesmo.Um agradecimento especial ao meu irmão, Erik, que me ajudou a ingressar no mercado de trabalho, quando eu ainda tinha 17 anos e era apenas um garoto com muita vontade de crescer. Saiba que sempre serei grato por isso.Agradeço a minha namorada, Mariana, por me apoiar e me tranquilizar nesses meses difíceis de elaboração da dissertação. Meus dias são mais felizes com você ao meu lado.Sou extremamente grato ao meu orientador, professor Dr. Bruno Salotti, pela paciência, ensinamentos, atenção e ajuda no longo processo que foi a preparação dessa dissertação. Será sempre uma referência para mim.Um agradecimento aos colegas e demais professores do programa. Por conta da pandemia e aulas remotas, não foi possível ter um contato mais próximo, mas mesmo assim, pude conhecer e trocar experiências com pessoas extremamente qualificadas. Agradecimento também ao professor Dr. Márcio Borinelli, que me deu a oportunidade de atuar na monitoria em aulas da graduação, experiência muito enriquecedora para a minha formação acadêmica.Por fim, agradeço aos funcionários da FEA-USP, integrantes da banca, participantes desta pesquisa, aos meus professores da FECAP, onde cursei a graduação, e a todos profissionais que me inspiraram e que me fizeram evoluir ao longo de toda minha carreira como contador e auditor. RESUMO Francisco, T. C. (2023). Auditoria de estimativas complexas: uma análise da percepção e desafios enfrentados pelos auditores. (Dissertação de mestrado, Faculdade de Economia, Administração, Contabilidade e Atuária, Universidade de São Paulo). Recuperado de www.teses.usp.br.Nos últimos anos, preparadores, reguladores e auditores têm tido como um dos principais desafios garantir que as estimativas complexas estejam refletidas de forma fidedigna nas demonstrações financeiras. Considerando que as estimativas complexas estão geralmente suportadas por diversas premissas não observáveis, tais como expectativas de crescimento de receitas, evolução de margem bruta, taxas de desconto, entre outras, o objetivo desta pesquisa foi identificar como se dá a atuação dos auditores na execução da auditoria de estimativas complexas. Para atingir esse objetivo, desenvolvemos uma pesquisa qualitativa, em que entrevistamos doze profissionais, sendo gerentes e sócios, de auditoria que atuam no Brasil, pertencentes a oito firmas de auditoria, com o propósi...

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The informational relevance of key audit matters

Cited by 14 publications

References 32 publications

Has it become more readable? Empirical evidence of key matters in independent audit reports,

Has it become more readable? Empirical evidence of key matters in independent audit reports,

Mapping the state of expanded audit reporting: a bibliometric view

Auditoria de estimativas complexas: uma análise da percepção e desafios enfrentados pelos auditores

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