The impact of key audit matters and firm performance on investor reaction: An empirical study on the Philippine stock exchange index from 2016 to 2019

• Main Authors: De Castro, Bianca Mae S., De Leon, Carmella Grace R., Go, Leiana Aika L., Llobrera, Erin Chelsea Y.
• Format: text
• Language: English
• Published: Animo Repository 2022
• Subjects: Stocks—Philippines—Rate of return; Stock price indexes—Philippines; Audited financial statements—Philippines; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etdb_acc/28; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1066&context=etdb_acc
• Institution: De La Salle University

As the number of investors and traders engaging in stock market activities in the Philippine Stock Market increase due to the ease and accessibility that online trading platforms have provided, establishing which financial or nonfinancial information that can be useful in making investment decisions has become necessary. As such, the study aims to determine the impact that the disclosure of key audit matters and the firm performance of companies have on investor reaction. Financial statements and audit reports of the companies listed in the Philippine Stock Exchange Index during the years 2016 to 2019 were used in the gathering of data to be used in the study. The gathered data were then statistically analyzed using descriptive statistics, panel data regression, and classic assumption tests. Results revealed that both Key Audit Matters and Firm Performance, as measured by Financial Ratios, did not significantly impact investor reaction. This can be attributed to the behavior of investors towards internal and external factors influencing the market, thus making stock prices more dynamic. Keywords: Key Audit Matters, Firm Performance, Financial Ratios, Investor Reaction, Cumulative Abnormal Return