Similarity of Key Audit Matters: an analysis through Clusters
DOI:
https://doi.org/10.5380/rcc.v16i1.89537Keywords:
Similarity. Key Audit Matters. Cluster Analysis.Abstract
The objective of this study was to identify the similarity index of the title of the Key Audit Matters (KAM), and which characteristics of audit firms and audited companies explain this similarity. It is expected to fill a gap present in the literature, when dealing with the similarity in the disclosure of the KAM in the audit report. From a sample of 1,370 observations of companies listed on B3, from 2016 to 2021, groupings into 2 clusters were generated. The exciting results are that in the analyzed period there was an average similarity of the KAM of 73%, and that smaller, less profitable companies that paid higher audit fees had greater similarity of the KAM. In addition, it was found that companies audited by big four firms, which did not have an approved opinion in the audit report and which had an external audit committee, showed less similarity in the KAM. It was also found that there is a difference in the similarity of the KAM between the medical sectors of the companies. This study contributes to the improvement of the accounting disclosure process, by allowing independent auditors to reflecton the similarity in the disclosure of the KAM and the impacts of this standardization on information users. It also contributed to the regulatory and supervisory bodies to assess whether the objectives of the regulations that instituted the new audit report containing the KAM are being achievedReferences
Alves, V., Sales Filho, M., da Silva, J., Gomes, H., & de Lima, D. (2022). A Semelhança do Conteúdo dos Principais Assuntos de Auditoria: Um Estudo nas Instituições Bancárias Listadas na B3. Revista de Contabilidade e Controladoria, 14(2). doi:http://dx.doi.org/10.5380/rcc.v14i2.83205
Alves Júnior, E. & Galdi, F. (2020). Relevância informacional dos principais assuntos de auditoria. Revista Contabilidade & Finanças, 31(82), 67-83. https://doi.org/10.1590/1808- 057x201908910
Asbahr, K. & Ruhnke, K. (2019). Real effects of reporting key audit matters on auditors’ judgment and choice of action. International Journal of Auditing. https://doi:10.1111/ijau.12154
Bédard, J. Gonthier-Besacier, N. & Schatt, A. (2014). Costs and benefits of reporting key audit matters in the audit report: The French experience. International Symposium on Audit Research. Recuperado de http://www.isarhq.org/2014_downloads/papers/ISAR2014_Bedard_Besacier_Schatt.pdf
Brasel, K., Doxey, M. M., Grenier, J. H., & Reffett, A. (2016). Risk disclosure preceding negative outcomes: the effects of reporting critical audit matters on judgments of auditor liability. The Accounting Review, 91(5), 1345–1362. https://doi:10.2308/accr-51380
Bortolon, P. M., Sarlo Neto, A., & Santos, T. B. (2013). Custos de auditoria e governança corporativa. Revista Contabilidade & Finanças, 24(61), 27-36. https://doi.org/10.1590/S1519-70772013000100004
Caliński, T. & Harabasz, J. (1974). A dendrite method for cluster analysis. Communications in Statistics, 3, 1-27. https://doi.org/10.1080/03610927408827101
Carvalho, O. A. de. (2021). Similaridade dos principais assuntos de auditoria em companhias abertas brasileiras. 107 f. Dissertação (mestrado) – Universidade Federal de Minas Gerais, Centro de Pós-Graduação e Pesquisas em Controladoria e Contabilidade.
Carson, E., Fargher, N. L., Geiger, M. A., Lennox, C. S., Raghunandan, K., & Willekens, M. (2013). Audit Reporting for Going-Concern Uncertainty: A Research Synthesis. AUDITING: A Journal of Practice & Theory, 32(Supplement 1), 353–384. https://doi:10.2308/ajpt-50324
Casterella, J. R., Francis, J. R., Lewis, B. L., & Walker, P. L. (2004). Auditor Industry Specialization, Client Bargaining Power, and Audit Pricing. AUDITING: A Journal of Practice & Theory, 23(1), 123–140. https://doi.org/10.2308/aud.2004.23.1.123
Comissão de Valores Mobiliários. (2018). Ofício-Circular CVM/ SNC/GNA Nº 01/18. Esclarecimentos relacionados à atuação do auditor no âmbito do mercado de valores mobiliários. http://www.cvm.gov.br/legislacao/oficios-circulares/snc/ocsnc-gna-01-2018.html
Conselho Federal de Contabilidade. (2016). Norma Brasileira de Contabilidade Técnica de Auditoria n. 701, de 17 de junho de 2016. Comunicação dos Principais Assuntos de Auditoria no Relatório do Auditor Independente. Recuperado de https://cfc.org.br/tecnica/normasbrasileiras-de-contabilidade/nbc-ta-de-auditoria-independente/
Conselho Federal de Contabilidade. (2016). Norma Brasileira de Contabilidade Técnica de Auditoria n. 200 (R1), de 05 de setembro de 2016. Objetivos Gerais do Auditor Independente e a Condução da Auditoria em Conformidade com Normas de Auditoria. Recuperado de https://cfc.org.br/tecnica/normasbrasileiras-de-contabilidade/nbc-ta-de-auditoria-independente/
Church, B. K., Davis, S. M. & Mccracken, S. A. (2008). The auditor's reporting model: a literature overview and research synthesis. Accounting Horizons, 22, 69-90.
Cruz, A., Nardi, P., Figueira, L., & Silva, R. (2019). A relação entre o novo relatório do auditor independente e o perfil das empresas auditadas e de auditoria. Revista Contemporânea de Contabilidade, 16(40), 3-23. https://doi.org/10.5007/2175-8069.2019v16n40p3
DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2-3), 275–326. https://doi:10.1016/j.jacceco.2014.09.002
Doornik, J. A. & Hansen H. (2008). An omnibus test for univariate and multivariate normality. Oxford Bulletin of Economics and Statistics, 70, 927–939. https://doi.org/10.1111/j.1468-0084.2008.00537.x
Dopuch, N., Holthausen, R., & Leftwich, R. (1987). Predicting audit qualifications with financial and market variables. Accounting Review, LXII (3),431-454. Disponível em: https://www.jstor.org/stable/247571
Duda, R., Hart, P. & Stork, D. (2001). Pattern Classification. 2ª ed. John Willey.
Fávero, L. P. & Belfiore, P. (2017). Manual de Análise de Dados, 1ª edição. Rio de Janeiro. Editora Elsevier.
Ferreira, C., Morais, A. I. (2019). Análise da relação entre características das empresas e os key audit matters divulgados. Revista Contabilidade & Finanças, 31, 83, 262-274. https://doi.org/10.1590/1808-057x201909040
Gimbar, C., Hansen, B., & Ozlanski, M. E. (2016a). The effects of critical audit matter paragraphs and accounting standard precision on auditor liability. The Accounting Review, 91, 1629–1646. https://doi.10.2308/accr-51382.
Gold, A., Heilmann, M., Pott, C., & Rematzki, J. (2020). Do key audit matters impact financial reporting behavior? International Journal of Auditing, 24(2), 232-244. https://doi:10.1111/ijau.12190
Gujarati, D. N. (2006). Econometria Básica. 4ª edição. Rio de Janeiro. Editora Elsevier.
Gujarati, D. N., & Porter, D. C. (2011). Econometria Básica. (5ª ed.) Porto Alegre: AMGH.
Hsieh, S., Custodio, C. B., & Vasarhelyi, M. A. (2021). The textual similarity of KAM disclosures for spanish companies. The International Journal of Digital Accounting Research, 21, 183-202. https://doi:10.4192/1577-8517-v21_7
Huang, H., Liu, L., Raghunandan, K., & Rama, D. V. (2007). Auditor Industry Specialization, Client Bargaining Power, and Audit Fees: Further Evidence. AUDITING: A Journal of Practice & Theory, 26(1), 147–158. https://doi.org/10.2308/aud.2007.26.1.147
International Auditing and Assurance Standards Board. (2015).
International Standard on Auditing (ISA) 701 (NEW), Communicating Key Audit Matters in the Independent Auditor’s Report. IAASB. Recuperado de: https://www.ifac.org/ publications-resources/international-standard-auditing-isa701-new communicating-key-audit-matters
Khan, A., Muttakin, M. B., & Siddiqui, J. (2012). Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy. Journal of Business Ethics, 114(2), 207–223. https://doi:10.1007/s10551-012-1336-0
Kend, M. & Nguyen, L. A. (2020). Investigating recent audit reform in the Australian context: An analysis of the KAM disclosures in audit reports 2017 at 2018. International Journal of Auditing, 24(3), 412–430. https://doi:10.1111/ijau.12205
Ketchen Junior, D. J. & Sook, C. L. (1996). The application of cluster analysis in strategic management research: an analysis and critique. Strategic Management Journal, 17, 441-458. https://doi.org/10.1002/(SICI)1097-0266(199606)17:6<441::AID-SMJ819>3.0.CO;2-G
Kettenring, J. R. (2006). The practice of cluster analysis. Journal of Classification, 23, 3-330. http://dx.doi.org/10.1007/s00357-006-0002-6
Lennox, C. S., Schmidt, J. J., & Thompson, A. (2017). Is the expanded model of audit reporting informative to investors? Evidence from the UK. SSRN Electronic Journal. https://doi:10.2139/ssrn.2619785
Lin, J., & Hwang, M. (2010). Audit quality, corporate governance, and earnings management: A meta‐analysis. International Journal of Auditing, 14(1), 57-77. https://doi:10.1111/j.1099-1123.2009.00403.x
Matos, T., Santos, O., Rodrigues, A., & Leite, R. (2018). Lobbying na regulação de auditoria no âmbito do IAASB. Revista Contabilidade & Finanças, 29(77), 246-265. https://doi.org/10.1590/1808-057x201804330
Mingoti, S. A. (2005). Análise de dados através de métodos de estatística multivariada: Uma abordagem aplicada. Belo Horizonte - Minas Gerais: Editora UFMG. 279 p.
Orquin, J., & Loose, S. (2013). A review on eye movements in decision-making. Acta Psychologica, 144(1), 190-206. http://dx.doi.org/10.1016/j.actpsy.2013.06.003
Pinto, I. & Morais, A. (2019). What matters in disclosures of key audit matters: Evidence from Europe. Journal of International Financial Management and Accounting, 30(2), 145-162. https://doi.org/10.1111/jifm.12095
Raupp, F. M., & Beuren, I. M. (2006). Como elaborar trabalhos monográficos em contabilidade: teoria e prática. (3ª ed.) São Paulo: Atlas.
Sierra-García, L., Gambetta, N., García-Benau, M. A., & Orta-Pérez, M. (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, 51, 227–240. https://doi:10.1016/j.bar.2019.02.004
Triola, M. F. (2005). Introdução à Estatística. (9ª ed.) Rio de Janeiro: LTC.
Velte, P. (2018). Does gender diversity in the audit committee influence key audit matters’ readability in the audit report? UK evidence. Corporate Social Responsibility and Environmental Management. https://doi:10.1002/csr.1491
Vinson, J. M., Robertson, J. C. & Cockrell, R. C. (2018). The effects of critical audit matter removal and duration on jurors’ assessments of auditor negligence. AUDITING: A Journal of Practice & Theory, 38(3), 183-202. https://doi.org/10.2308/ajpt-52319
Ward Junior, J. H. (1963). Hierarchical grouping to optimize an objective function Journal of the American Statistical Association, 58, 236-244. https://doi.org/10.1080/01621459.1963.10500845
Yang, L., Brink, A. G., & Wier, B. (2017). The impact of emotional intelligence on auditor judgment. International Journal of Auditing, 22(1), 83–97. https://doi.org/10.1111/ijau.12106
Downloads
Published
How to Cite
Issue
Section
License
The article submission implies commitment not to submit it to another journal and allows, if approved, its publication.
Whereas the authors of the text agree with the publication of this result without payment, reimbursement or compensation of any kind, the Journal Accounting & Controlling, through the Graduate Program in Accounting from the Accounting Department - Department of Applied Social Sciences - Federal University of Paraná, retains all copyright.
The published paperes do not necessarily representing the views of the magazine. Reproduction of articles, total or partial, can be made as long as the source is mentioned.
The authores are responsable for any kind of plagiarism in published papers.
The person responsible for submission declares under penalty of law, that the information about the authorship of the work is absolutely true and complete.
