Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality

© 2020, Emerald Publishing Limited. Purpose: This paper aims to ask whether the implementation of the expanded auditor’s report, which included a requirement to disclose key audit matters (KAMs) in Thailand since 2016, has improved audit quality. Design/methodology/approach: To answer this question,...

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Main Authors: Weerapong Kitiwong, Naruanard Sarapaivanich
Format: Journal
Published: 2020
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Online Access:https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85088560095&origin=inward
http://cmuir.cmu.ac.th/jspui/handle/6653943832/70300
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Institution: Chiang Mai University
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spelling th-cmuir.6653943832-703002020-10-14T08:32:13Z Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality Weerapong Kitiwong Naruanard Sarapaivanich Business, Management and Accounting Economics, Econometrics and Finance © 2020, Emerald Publishing Limited. Purpose: This paper aims to ask whether the implementation of the expanded auditor’s report, which included a requirement to disclose key audit matters (KAMs) in Thailand since 2016, has improved audit quality. Design/methodology/approach: To answer this question, the authors examined audit quality two years before and two years after its adoption by analysing 1,519 firm-year observations obtained from 312 companies. The authors applied logistic regression analyses to the firm-year observations. Findings: The authors found some weak evidence that KAMs disclosure improved audit quality because of auditors putting more effort into their audits and audits being performed thoroughly after the implementation of KAMs. Interestingly, the number of disclosed KAMs and the most common types of disclosed KAMs are not associated with audit quality. Only disclosed KAMs related to acquisitions are more informative because the presence of this type of disclosed KAMs signals the greater likelihood of financial restatements being made in a later year. Originality/value: Unlike previous studies on the impact of KAMs disclosure on audit quality, which used discretionary accruals as proxy for audit quality, this study used the occurrence of financial restatements. 2020-10-14T08:27:18Z 2020-10-14T08:27:18Z 2020-01-01 Journal 02686902 2-s2.0-85088560095 10.1108/MAJ-09-2019-2410 https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85088560095&origin=inward http://cmuir.cmu.ac.th/jspui/handle/6653943832/70300
institution Chiang Mai University
building Chiang Mai University Library
continent Asia
country Thailand
Thailand
content_provider Chiang Mai University Library
collection CMU Intellectual Repository
topic Business, Management and Accounting
Economics, Econometrics and Finance
spellingShingle Business, Management and Accounting
Economics, Econometrics and Finance
Weerapong Kitiwong
Naruanard Sarapaivanich
Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality
description © 2020, Emerald Publishing Limited. Purpose: This paper aims to ask whether the implementation of the expanded auditor’s report, which included a requirement to disclose key audit matters (KAMs) in Thailand since 2016, has improved audit quality. Design/methodology/approach: To answer this question, the authors examined audit quality two years before and two years after its adoption by analysing 1,519 firm-year observations obtained from 312 companies. The authors applied logistic regression analyses to the firm-year observations. Findings: The authors found some weak evidence that KAMs disclosure improved audit quality because of auditors putting more effort into their audits and audits being performed thoroughly after the implementation of KAMs. Interestingly, the number of disclosed KAMs and the most common types of disclosed KAMs are not associated with audit quality. Only disclosed KAMs related to acquisitions are more informative because the presence of this type of disclosed KAMs signals the greater likelihood of financial restatements being made in a later year. Originality/value: Unlike previous studies on the impact of KAMs disclosure on audit quality, which used discretionary accruals as proxy for audit quality, this study used the occurrence of financial restatements.
format Journal
author Weerapong Kitiwong
Naruanard Sarapaivanich
author_facet Weerapong Kitiwong
Naruanard Sarapaivanich
author_sort Weerapong Kitiwong
title Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality
title_short Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality
title_full Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality
title_fullStr Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality
title_full_unstemmed Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality
title_sort consequences of the implementation of expanded audit reports with key audit matters (kams) on audit quality
publishDate 2020
url https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85088560095&origin=inward
http://cmuir.cmu.ac.th/jspui/handle/6653943832/70300
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