IDEAS home Printed from https://ideas.repec.org/a/alu/journl/v1y2024i26p16.html
   My bibliography  Save this article

Clarity In The Numbers: The Impact Of Keyaudit Matters On Bucharest Stock Exchange Auditor Reports

Author

Listed:
  • George-Silviu CORDOÅž

    (Bolyai University)

  • Tudor OPRIÅžOR

    (Teaching Assistant Babes-Bolyai University)

Abstract

This study investigates the application of Key Audit Matters (KAMs) in auditor reports for companies listed on the Bucharest Stock Exchange (BSE) following the adoption of revised International Standards on Auditing. Using content analysis of auditor reports from 2018-2022, we analyze the trends in selected auditors and the KAMs that are being reported. Our findings indicate that auditors disclosed an average of 2-3 KAMs per report, with revenue recognition, asset valuation, and provisions being the most common topics. While KAM reporting increased transparency, the study reveals challenges in consistency and specificity of disclosures. The results provide insights on KAM implementation in an emerging market context and inform ongoing debates on enhancing audit report communicative value.

Suggested Citation

  • George-Silviu CORDOÅž & Tudor OPRIÅžOR, 2024. "Clarity In The Numbers: The Impact Of Keyaudit Matters On Bucharest Stock Exchange Auditor Reports," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(26), pages 1-16.
    • Handle: RePEc:alu:journl:v:1:y:2024:i:26:p:16
    as

    Download full text from publisher

    File URL: http://oeconomica.uab.ro/upload/lucrari/2620241/16.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nicolás Gambetta & Laura Sierra‐García & María Antonia García‐Benau & Josefina Novejarque‐Civera, 2023. "The Informative Value of Key Audit Matters in the Audit Report: Understanding the Impact of the Audit Firm and KAM Type," Australian Accounting Review, CPA Australia, vol. 33(2), pages 114-134, June.
    2. repec:eme:maj000:02686901311311936 is not listed on IDEAS
    3. Sierra-García, Laura & Gambetta, Nicolás & García-Benau, María A. & Orta-Pérez, Manuel, 2019. "Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom," The British Accounting Review, Elsevier, vol. 51(3), pages 227-240.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    5. Mara Cameran & Annalisa Prencipe & Marco Trombetta, 2016. "Mandatory Audit Firm Rotation and Audit Quality," European Accounting Review, Taylor & Francis Journals, vol. 25(1), pages 35-58, May.
    6. Duboisée de Ricquebourg, Alan & Maroun, Warren, 2023. "How do auditor rotations affect key audit matters? Archival evidence from South African audits," The British Accounting Review, Elsevier, vol. 55(2).
    7. Ahsan Habib & Hedy Jiaying Huang, 2019. "Abnormally long audit report lags and future stock price crash risk: evidence from China," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(4), pages 611-635, April.
    8. Ahsan Habib & Hedy Jiaying Huang, 2019. "Abnormally long audit report lags and future stock price crash risk: evidence from China," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(4), pages 611-635, April.
    9. Ann Vanstraelen & Caren Schelleman & Roger Meuwissen & Isabell Hofmann, 2012. "The Audit Reporting Debate: Seemingly Intractable Problems and Feasible Solutions," European Accounting Review, Taylor & Francis Journals, vol. 21(2), pages 193-215, August.
    10. Dorothy Feldmann & William J. Read, 2013. "Going‐concern audit opinions for bankrupt companies – impact of credit rating," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 28(4), pages 345-363, April.
    11. Dorothy Feldmann & William J. Read, 2013. "Going-concern audit opinions for bankrupt companies – impact of credit rating," Managerial Auditing Journal, Emerald Group Publishing, vol. 28(4), pages 345-363, April.
    12. Elizabeth Gutierrez & Miguel Minutti-Meza & Kay W. Tatum & Maria Vulcheva, 2018. "Consequences of adopting an expanded auditor’s report in the United Kingdom," Review of Accounting Studies, Springer, vol. 23(4), pages 1543-1587, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tarek Abdelfattah & Mohamed Elmahgoub & Ahmed A. Elamer, 2021. "Female Audit Partners and Extended Audit Reporting: UK Evidence," Journal of Business Ethics, Springer, vol. 174(1), pages 177-197, November.
    2. Shao-Huai Liang & Yu-Ting Hsieh & Hsuan-Chu Lin & Hui-Yu Hsiao, 2023. "What underlies key audit matters? Evidence from Taiwan," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 1243-1258, April.
    3. Sau Yu Ong & Robyn Moroney & Xinning Xiao, 2022. "How do key audit matter characteristics combine to impact financial statement understandability?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 805-835, March.
    4. Pinto, Inês & Morais, Ana Isabel & Quick, Reiner, 2020. "The impact of the precision of accounting standards on the expanded auditor’s report in the European Union," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 40(C).
    5. Wang, Qi & Zhang, Lin & Ma, Qianqun & Wu, Chong, 2024. "The impact of financial risk on boilerplate of key audit matters: Evidence from China," Research in International Business and Finance, Elsevier, vol. 70(PB).
    6. Duboisée de Ricquebourg, Alan & Maroun, Warren, 2023. "How do auditor rotations affect key audit matters? Archival evidence from South African audits," The British Accounting Review, Elsevier, vol. 55(2).
    7. Ma, Jin & Coram, Paul & Troshani, Indrit, 2024. "The effect of key audit matters and management disclosures on auditors’ judgements and decisions: An exploratory study," The British Accounting Review, Elsevier, vol. 56(2).
    8. Ran An & Wentao Li & Di Wang & Yanyan Wang & Lisheng Yu, 2023. "Do Key Audit Matters Affect Operating Activities? Evidence from Inventory Management," Abacus, Accounting Foundation, University of Sydney, vol. 59(1), pages 300-339, March.
    9. Li, Valerie & Luo, Yan, 2023. "Costs and benefits of auditors' disclosure of critical audit matters: Initial evidence from the United States," Advances in accounting, Elsevier, vol. 60(C).
    10. Nien-Su Shih, 2024. "Does Using the Extended Audit Report Decrease Information Asymmetry in Family Firms?," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 14(1), pages 1-3.
    11. Tache Marta, 2020. "‘Big 4’ influence on audit market," Central European Economic Journal, Sciendo, vol. 7(54), pages 143-156, January.
    12. Nicolás Gambetta & Laura Sierra‐García & María Antonia García‐Benau & Josefina Novejarque‐Civera, 2023. "The Informative Value of Key Audit Matters in the Audit Report: Understanding the Impact of the Audit Firm and KAM Type," Australian Accounting Review, CPA Australia, vol. 33(2), pages 114-134, June.
    13. Marcus M. Doxey & James G. Lawson & Thomas J. Lopez & Quinn T. Swanquist, 2021. "Do Investors Care Who Did the Audit? Evidence from Form AP," Journal of Accounting Research, Wiley Blackwell, vol. 59(5), pages 1741-1782, December.
    14. Zhang, Penny F. & Shailer, Greg, 2021. "Changes in audit effort and changes in auditors’ disclosures of risks of material misstatement," The British Accounting Review, Elsevier, vol. 53(3).
    15. Nicolás Gambetta & Laura Sierra García & María Antonia García Benau & Josefina Novejarque Civera, 2022. "The informative value of Key Audit Matters in the audit report," Documentos de Investigación 129, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    16. Liao, Lin & Sharma, Divesh & Yang, Yitang (Jenny) & Zhao, Rui, 2023. "Adoption and content of key audit matters and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 88(C).
    17. Xiaoqiang Zhi & Zuming Kang, 2021. "Critical audit matters and stock price crash risk," Frontiers of Business Research in China, Springer, vol. 15(1), pages 1-25, December.
    18. Zhong, Xi & Ren, Liuyang & Song, Tiebo, 2021. "Different effects of internal and external tournament incentives on corporate financial misconduct: Evidence from China," Journal of Business Research, Elsevier, vol. 134(C), pages 329-341.
    19. Emad Noureldeen & Mohamed Elsayed & Ahmed A. Elamer & Jianming Ye, 2024. "Two-tier board characteristics and expanded audit reporting: Evidence from China," Review of Quantitative Finance and Accounting, Springer, vol. 63(1), pages 195-235, July.
    20. Elsayed, Mohamed & Elshandidy, Tamer & Ahmed, Yousry, 2023. "Is expanded auditor reporting meaningful? UK evidence," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 53(C).

    More about this item

    Keywords

    eyAuditMatters; audit reporting; Bucharest Stock Exchange; InternationalStandards on Auditing;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:alu:journl:v:1:y:2024:i:26:p:16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dan-Constantin Danuletiu (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.