EconPapers    
Economics at your fingertips  
 

Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom

Laura Sierra-García, Nicolás Gambetta, María A. García-Benau and Manuel Orta-Pérez

The British Accounting Review, 2019, vol. 51, issue 3, 227-240

Abstract: This study was conducted to analyse the influence of auditor and client characteristics on the magnitude and type of key audit matters (KAM) disclosed in the audit reports of the FTSE 100 companies in the UK during the period 2013–2016. A recently introduced standard requires auditors to reveal the main risks faced by the client and to describe how these are addressed in the audit. Our results show that Deloitte, EY and KPMG tend to report fewer entity-level-risk KAM (ELRKAM) than PwC, while KPMG and BDO report fewer account-level-risk KAM (ALRKAM) than PwC. In general, auditors of companies that pay higher audit services fees present more ELRKAM and fewer ALRKAM. Our findings also show that client characteristics are relevant to the number and type of KAM included in the audit report. Our results show that auditor and client characteristics are determinants of the number of KAM disclosed and, moreover, determine the type of KAM disclosed in the audit reports.

Keywords: Key audit matters; FTSE 100; ISA 700; ISA 701; Auditor characteristics; Client characteristics (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0890838919300253
Full text for ScienceDirect subscribers only

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:eee:bracre:v:51:y:2019:i:3:p:227-240

DOI: 10.1016/j.bar.2019.02.004

Access Statistics for this article

The British Accounting Review is currently edited by Nathan Lael Joseph and Alan Lowe

More articles in The British Accounting Review from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-05-02
Handle: RePEc:eee:bracre:v:51:y:2019:i:3:p:227-240