Key audit matters as insights into auditors’ professional judgement: Evidence from the European Union

IF 3.3 3区管理学 Q1 BUSINESS, FINANCE

Journal of Accounting and Public Policy Pub Date : 2025-04-01 DOI:10.1016/j.jaccpubpol.2025.107311

Mara Cameran , Domenico Campa

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Abstract

The European Union (EU) Regulation 537/2014 introduced the mandatory disclosure of Key Audit Matters (KAMs) within an auditor’s report, with the aim of increasing the informational value of these reports. Extant research, however, shows contrasting results as to whether KAM disclosure is providing relevant information to stakeholders. Moreover, concerns have been raised about unintended consequences from KAM disclosure, with respect to the process that leads to the issuance of the audit report. Using a sample of 6,164 firm-year observations for the period 2017–2021, related to 1,660 unique firms listed in all EU Member States, we find that the number of KAMs is positively associated with audit fees, audit report lags and the probability that an opinion different from the standard unqualified opinion is issued. Moreover, we document that both KAMs related to entity-level and account-level risks are positively associated with audit fees, whereas only entity-level KAMs drive the positive association with audit report lags and the issuance of a modified opinion. Our research speaks directly to EU legislators, the International Auditing and Assurance Standards Board, the US Public Company Accounting Oversight Board, and any other regulators around the globe that have mandated the disclosure of KAMs within audit reports.

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来源期刊

Journal of Accounting and Public Policy Multiple-

CiteScore

4.80

自引率

2.80%

发文量

期刊介绍： The Journal of Accounting and Public Policy publishes research papers focusing on the intersection between accounting and public policy. Preference is given to papers illuminating through theoretical or empirical analysis, the effects of accounting on public policy and vice-versa. Subjects treated in this journal include the interface of accounting with economics, political science, sociology, or law. The Journal includes a section entitled Accounting Letters. This section publishes short research articles that should not exceed approximately 3,000 words. The objective of this section is to facilitate the rapid dissemination of important accounting research. Accordingly, articles submitted to this section will be reviewed within fours weeks of receipt, revisions will be limited to one, and publication will occur within four months of acceptance.