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What matters in disclosures of key audit matters: Evidence from Europe
Journal of International Financial Management & Accounting ( IF 2.808 ) Pub Date : 2018-12-23 , DOI: 10.1111/jifm.12095
Inês Pinto 1 , Ana Isabel Morais 1
Affiliation  

New regulation in the European Union has introduced the mandatory disclosure of key audit matters (KAMs) to audit reports. The EU has identified KAMs as significant risks, significant transactions or events, or significant judgments by auditors. This paper aims to determine the factors that influence the number of KAMs that auditors disclose in the main European countries under the new regulation. We predict that the litigation risk, reputation loss, auditor–client relationship, precision of accounting standards, and the effect of regulators and supervisors’ activities affect the number of KAMs that auditors disclose. The sample consists of firms on the FTSE 100, CAC 40, or AEX 25 that have disclosed KAMs at the 2016 fiscal year‐end. In line with our hypotheses, the findings show that a higher number of business segments (complexity) and more precise accounting standards lead to the disclosure of a higher number of KAMs. Contrary to our expectations, the results indicate that a positive association exists between the audit fee and the number of KAMs disclosed. As audit fees can be related to higher client risk, this finding could indicate that litigation risk dominates any auditor–client dependence. Further, although auditors often view their audits of banks as complex, the findings show a negative association between banks and the number of disclosed KAMs. This evidence may be related to the fact that financial institutions are in a highly regulated and supervised industry that reduces the need to disclose the KAMs.

中文翻译:

关键审计事项披露中的重要事项:来自欧洲的证据

欧盟的新法规将强制性关键审计事项(KAM)披露给审计报告。欧盟已将KAM确定为重大风险,重大交易或事件或审核员的重大判断。本文旨在确定影响新法规下主要欧洲国家的审计师披露的KAM数量的因素。我们预测,诉讼风险,声誉损失,审计师与客户的关系,会计准则的准确性以及监管者和监管者活动的影响会影响审计师披露的KAM数量。样本由FTSE 100,CAC 40或AEX 25的公司组成,这些公司已在2016财年末披露了KAM。根据我们的假设,调查结果表明,更多的业务部门(复杂性)和更精确的会计准则导致披露了更多的KAM。与我们的预期相反,结果表明审计费用与披露的KAM数量之间存在正相关关系。由于审计费用可能与更高的客户风险相关,因此该发现可能表明诉讼风险主导着任何审计师-客户的依赖。此外,尽管审计师经常认为对银行的审计很复杂,但调查结果表明,银行与所披露的KAM数量之间存在负相关关系。此证据可能与以下事实有关:金融机构处于受到严格监管和监督的行业,从而减少了披露KAM的需要。与我们的预期相反,结果表明审计费用与披露的KAM数量之间存在正相关关系。由于审计费用可能与更高的客户风险相关,因此该发现可能表明诉讼风险主导着任何审计师-客户的依赖。此外,尽管审计师经常认为对银行的审计很复杂,但调查结果表明,银行与所披露的KAM数量之间存在负相关关系。此证据可能与以下事实有关:金融机构处于受到严格监管和监督的行业,从而减少了披露KAM的需要。与我们的预期相反,结果表明审计费用与披露的KAM数量之间存在正相关关系。由于审计费用可能与更高的客户风险相关,因此该发现可能表明诉讼风险主导着任何审计师-客户的依赖。此外,尽管审计师经常认为对银行的审计很复杂,但调查结果表明,银行与所披露的KAM数量之间存在负相关关系。此证据可能与以下事实有关:金融机构处于受到严格监管和监督的行业,从而减少了披露KAM的需要。这一发现可能表明,诉讼风险在所有审计师与客户的依存关系中占主导地位。此外,尽管审计师经常认为对银行的审计很复杂,但调查结果表明,银行与所披露的KAM数量之间存在负相关关系。此证据可能与以下事实有关:金融机构处于受到严格监管和监督的行业,从而减少了披露KAM的需要。这一发现可能表明,诉讼风险在所有审计师与客户的依存关系中占主导地位。此外,尽管审计师经常认为对银行的审计很复杂,但调查结果表明,银行与所披露的KAM数量之间存在负相关关系。此证据可能与以下事实有关:金融机构处于受到严格监管和监督的行业,从而减少了披露KAM的需要。
更新日期:2018-12-23
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