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

IF 3.3 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2024-12-12 DOI:10.1016/j.intaccaudtax.2024.100670

Weerapong Kitiwong, Erboon Ekasingh, Naruanard Sarapaivanich

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引用次数: 0

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.

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来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.