Not All Critical Audit Matters (CAMs) Are the Same: Anti‐Herding Behavior in CAM Disclosures

Will Anding, Allen D. Blay and Zahn Bozanic

Journal of Business Finance & Accounting, 2026, vol. 53, issue 2, 733-755

Abstract: Consistent with herding behavior, prior research generally finds little to no evidence of market reactions to the initiation of critical audit matter (CAM) disclosures in the audit report. We expand upon recent work to identify instances of anti‐herding behavior in CAM disclosures, which we capture by examining topically distinct and textually dissimilar CAM disclosures. Consistent with anti‐herding behavior, we first document that first‐time CAM disclosures with these attributes result in greater equity market responses surrounding the release of the audit report, especially when accompanied by a weaker information environment, greater disclosure specificity, and heightened client litigation risk. Additional evidence indicates that these types of anti‐herding CAM disclosures may create confusion among some market participants. We provide further support that distinct and dissimilar CAM disclosures reduce the information gap between auditors and investors by showing that these measures provide explanatory power in an audit fee model. Lastly, we document decreases in each of our measures from the year of CAM implementation to the second year, suggesting a trend toward boilerplate disclosures. Overall, our results provide novel evidence that CAM disclosures that “stick out” from the herd provide information to financial statement users and thus reduce the information gap between auditors and financial statement users.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jbfa.70034

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:53:y:2026:i:2:p:733-755

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0306-686X

Access Statistics for this article

Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker

More articles in Journal of Business Finance & Accounting from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().