Are Audit Committees more challenging given a specific investor base? Does the answer change in the presence of prospective critical audit matter disclosures?

Kang, Yoon Ju

doi:10.1016/j.aos.2019.04.001

Cited by 41 publications

(28 citation statements)

References 53 publications

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“…commissioning Big 4 audit firms and a higher proportion of independent directors) are likely to have a higher number of KAMs, suggesting a willingness of governance board to risk disclosure. This is in line with prior research (Kang, 2019;Velte, 2018Velte, , 2020.…”

Section: Regression Analysis Resultssupporting

confidence: 91%

“…In this study, sexes of auditors refer to the biologically defined characteristics (men or women), and the data on auditor sexes are based on the auditors' name titles (Mr. and Ms.) in the auditors' reports. Kang (2019), the audit committee plays a monitoring role in external auditor's KAM communication. Velte (2020) reported a positive association between the audit committee's financial and industry expertise and KAM readability and between the number of audit committee meetings and the KAM readability.…”

Section: Independent Variablesmentioning

confidence: 99%

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Determining factors of key audit matter disclosure in Thailand

Wuttichindanon

Issarawornrawanich

2020

PAR

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Purpose In Southeast Asia, auditors play a crucial role in the quality of financial reports. With the introduction of a new format of auditors’ report that requires disclosure of key audit matters (KAM), the disclosure practice of auditors is, thus, of great interest. Specifically, this study aims to investigate the factors that auditors take into consideration when issuing KAMs. Design/methodology/approach The research design is quantitative, with a focus on the number of KAM disclosures issued by auditors. As existing studies rely on the number of KAM disclosures in the analysis, this current research, thus, uses the quantity of KAM disclosures for comparison purposes. The analysis relies on secondary data and multiple regression analysis is used to establish the association between the number of KAM disclosures and three groups of determining factors, namely, auditor characteristics, corporate governance mechanisms and firm characteristics. Findings The significant determining factors of KAM disclosure include auditor’s litigation risk, firm complexity, profitability and industry type. Firms using a Big 4 audit firm, firms with many subsidiaries and firms in the technology, property and construction and finance industries have higher numbers of KAMs, while highly profitable firms issue lower numbers of KAMs. As for corporate governance mechanisms, the number of KAMs is significantly positively correlated with the number of independent directors (p < 0.10). Originality/value This research includes key corporate governance parties in the examination, including external auditors, independent directors and audit committees. The finding affirms the influence of Big 4 on KAM disclosure in Southeast Asia, while their roles are not significant in Western samples. The result also unearths the monitoring role of independent directors in KAM disclosure. The role of the audit committee in KAM disclosure is insignificant in Thai samples, while the committee role is statistically significant in the Western samples. Variations in the findings between this study and previous research could be attributed to differences in institutional settings between both regions.

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Section: Regression Analysis Resultssupporting

confidence: 91%

Section: Independent Variablesmentioning

confidence: 99%

Determining factors of key audit matter disclosure in Thailand

Wuttichindanon

Issarawornrawanich

2020

PAR

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“…This is happened because the inddirect influence which given bt those three variable through timeliness as the intervening variable is higher than the the direct impact, thus indicating that the timeliness of financial reporting variable can be used as an intervening variable to strengthen and mediate the relationship between dependent and independent variables in this research. Then, this result also in line with the previous research which revealed that good corporate governance variable specivically audit committee meeting, foreign ownership and auditor quality bring positive significant impact by (Ashraf et al, 2019;Kang, 2019;Shin & Kim, 2018;Suhadak et al, 2019;Tarmidi et al, 2019). Furthermore, previous research also delineated that timeliness of financial statement is an important impact to increase the positive investors' reaction (Herdiana, 2019).…”

Section: The Effect Of Independent Board Of Commissioner Audit Committee Meeting Foreign Ownership and Auditor Quality On Investors' Reacsupporting

confidence: 88%

“…Audit Committee meeting negative significant affects investor's reaction, this is in line with the results of research conducted by (Ashraf et al, 2019;Kang, 2019) where the intensity of the meeting conducted by the audit committee will cause anxiety for investors related to negative issues or mistakes made by the company so that, it requires an ongoing audit with intensity with a long period. Then, Foreign ownership has a negative significant effect on investors' reaction, this is in line with research conducted by (Shin & Kim, 2018), the large amounts of foreign ownership will threaten the company because foreign investors with large holdings can withdraw and sell their shares when dissatisfied so that the company's performance can be threatened unstable which makes investors give a negative assessment of the company in question.…”

Section: The Effect Of Independent Commissioner Audit Committee Meeting Foreign Ownership and Auditor Quality On Investors' Reactionsupporting

confidence: 81%

“…In this research, GCG indicators used are the independent board of commissioners, audit committee meetings, foreign ownership, and audit quality. Previous research that discussed the indicator was conducted by (Ashraf et al, 2019;Kang, 2019;Tarmidi et al, 2019). Where if GCG related to an independent board of commissioners, audit committee meetings, foreign ownership, and audit quality is managed properly, the company's reputation will be of positive value in the eyes of investors thus giving rise to the trust to continue investing in the company.…”

Section: The Effect Of the Independent Board Of Commissioners Audit Committee Meetings Foreign Ownership And Audit Quality On Investors' mentioning

confidence: 99%

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Good Corporate Governance: Does The Timeliness of Financial Reporting Has an Effect to The Investors’ Reaction?

Furwanti

Haryono

Lestari

2021

JBK

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This research aims to find out the influence of independent committee boards, audit committee repats, foreign ownership, and audit quality on the timeliness of financial reporting and their impact on investors' reactions both directly and indirectly. This research uses a quantitative method with population and sample of companies registered in Jakarta Islamic Index (JII). Data will be processed using path analysis using IMB SPSS Statistic 22 software. Based on the results of this research, it is known that directly, independent commissioner variables and audit quality have a positive effect on investor reactions, while foreign ownership variables and audit committee meetings have a negative effect on investors’ reactions. While the indirect influence can be known that only audit committee meetings, foreign ownership, and audit quality can have a significant impact on investors' reactions through the timeliness of disclosure of financial statements as intervening variables. The implication of this research is to prove that the existence of corporate governance in terms of determining the intensity of audit committee meetings, foreign ownership, and determination of KAP selection in improving the quality of audits can make the company more efficient and timely in disclosing its financial statements in order make positive reactions from investors that indicates good news for the company.

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Corporate Social Responsibility Through a Wind Turbine Lens—A Literature Review

Kealy

2020

Evaluating Sustainable Development and Corporate Social Responsibility Projects

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Are Audit Committees more challenging given a specific investor base? Does the answer change in the presence of prospective critical audit matter disclosures?

Cited by 41 publications

References 53 publications

Determining factors of key audit matter disclosure in Thailand

Determining factors of key audit matter disclosure in Thailand

Good Corporate Governance: Does The Timeliness of Financial Reporting Has an Effect to The Investors’ Reaction?

Corporate Social Responsibility Through a Wind Turbine Lens—A Literature Review

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