A New Uncertainty Measure—CAM

Klevak, Julia; Livnat, Joshua; Pei, Duo; Suslava, Kate

doi:10.3905/joi.2020.1.161

Cited by 8 publications

(3 citation statements)

References 21 publications

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“…We write specific natural language processing (NLP) rules that capture more than 20 of the most common CAMs as well as a comprehensive set of audit procedures. Consistent with Hollie (2020), Burke, R. Hoitash, U. Hoitash, and Xiao (2021), and Klevak, Livnat, Pei, and Suslava (2021), we find that the most frequent CAMs are in the areas of fair value, acquisition, goodwill impairment, tax positions, and revenue recognition, and a nontrivial percentage are in lease accounting, likely because of a recent leases rule change. In terms of audit procedures, auditors mostly report performing tests of controls and analytical procedures when addressing CAMs, and tend to rely less on inspection and observation.…”

Section: Introductionsupporting

confidence: 86%

“…Specifically, earnings' ability to predict market prices decreases for firms with ISA 700 disclosures, likely because of the additional uncertainty.2Klevak et al (2021) also finds early evidence that more extensive and longer CAMs correlate with more negative abnormal returns and analyst revisions but does not sufficiently control for other factors that may affect these relations. In addition, the authors do not examine the effects of CAMs on market perceptions of uncertainty.Downloaded from http://publications.aaahq.org/ajpt/article-pdf/doi/10.2308/AJPT-2020-113/79237/ajpt-2020-113.pdf by Duo Pei on 01 February 2023…”

mentioning

confidence: 99%

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Critical Audit Matters: Possible Market Misinterpretation

Klevak

Livnat

Pei

et al. 2023

Auditing: A Journal of Practice &Amp; Theory

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The Public Company Accounting Oversight Board (PCAOB) recently expanded audit reports to disclose Critical Audit Matters (CAMs) and the audit procedures used to address them. We study the first wave of CAM disclosers from July 2019 to May 2020, which included large accelerated filers reporting on their 2019 fiscal year results. We examine whether market participants erroneously perceive firms with more extensive CAM disclosures to be riskier than firms with less extensive CAM disclosures. We find that firms with more extensive CAM disclosures are associated with increased perceived uncertainty: stock prices of these firms are significantly more volatile and analysts’ forecasts are significantly more dispersed than those of firms with less extensive CAM disclosures.

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Section: Introductionsupporting

confidence: 86%

mentioning

confidence: 99%

Critical Audit Matters: Possible Market Misinterpretation

Klevak

Livnat

Pei

et al. 2023

Auditing: A Journal of Practice &Amp; Theory

View full text Add to dashboard Cite

show abstract

“…Thailand and UK keywords are widely repeated in Asian and European EAR studies, respectively, which indicates a more significant number of related research in these two countries than in other countries of each continent (Pratoomsuwan and Yolrabil, 2020a; Abdelfattah et al , 2021; Elmarzouky et al , 2022a). The frequently repeated keywords in EAR Research of America, like Nonprofessional Investors , Market Reaction , Disclosure and Financial Reporting Quality , indicate the regulators’ emphasis on protecting shareholders via appropriate disclosure (Klevak et al , 2021; Christensen et al , 2014). This result is per La Porta et al (1998), who suggest that the common law system delivers more suitable protection for minority shareholders than the civil law system.…”

Section: Results Of Bibliometric Analysismentioning

confidence: 99%

Mapping the state of expanded audit reporting: a bibliometric view

Mashayekhi

Dolatzarei

Faraji

et al. 2023

MEDAR

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Purpose This study aims to identify the intellectual structure of expanded audit reporting (EAR), offers a quantitative summation of prominent themes, contributors and knowledge gaps and provides suggestions for further research. Design/methodology/approach This research uses various bibliometric techniques, including co-word and co-citation analysis for EAR science mapping, based on 123 papers from Scopus Database between 1991 and 2022. Findings The results show EAR research is focused on Audit Quality; Auditor Liability and Litigation; Communicative Value and Readability; Audit Fees; and Disclosure. Regarding EAR research, Brasel et al. (2016), article is the most cited paper, Bédard J. is the most cited author, Laval University is the most influential university, The Accounting Review is the most cited journal and USA is the leading country. Furthermore, the results show that in common law countries, in which shareholder rights and litigation risk is high, topics such as disclosure quality and audit litigation have been addressed more; and in civil legal system countries, which usually favor stakeholders’ rights, topics of gender diversity or corporate governance have been more studied. Practical implications This research has practical implications for standard setters and regulators, who can identify important, overlooked and emerging issues and consider them in future policies and standards. Originality/value This paper contributes to the literature by providing a more objective and comprehensive status of the accounting research on EAR, identifying the gaps in the literature and proposing a direction for future research to continue the discussion on the value-relevance of EAR to achieve more transparency and less audit expectation gap.

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An Investigation of U.S. Critical Audit Matter Disclosures

Burke

Hoitash

et al. 2020

SSRN Journal

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A New Uncertainty Measure—CAM

Cited by 8 publications

References 21 publications

Critical Audit Matters: Possible Market Misinterpretation

Critical Audit Matters: Possible Market Misinterpretation

Mapping the state of expanded audit reporting: a bibliometric view

An Investigation of U.S. Critical Audit Matter Disclosures

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