Does the audit committee member’s accounting experience associated with key audit matter types?

Ahmed Aboud (), Hany Elbardan (), Moataz El-Helaly () and Amr Kotb ()
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Ahmed Aboud: Zayed University
Hany Elbardan: Bournemouth University Business School
Moataz El-Helaly: American University in Cairo
Amr Kotb: Zayed University

Review of Quantitative Finance and Accounting, 2024, vol. 63, issue 2, No 11, 753-780

Abstract: Abstract Using a narrow view of accounting experience, this study examines the relationship between accounting experience on audit committees (ACs) and key audit matters (KAMs) in the UK. In contrast to extant research, this study distinguishes between different types of accounting experience on AC and how this relates to different types of KAMs. We also address the effects of the interplay between accounting and supervisory experiences on KAMs. Using a sample from FTSE 350, we provide robust evidence that accounting experience on ACs is an important driver of extended audit reporting quality. Moreover, we find evidence that different types of accounting experience have mostly similar effects on different types of KAMs. Further, we show that AC members with prior supervisory experience complement the role of accounting experience. Nevertheless, this complementary relationship varies between types of KAMs. Overall, our study offers important insights regarding how accounting and supervisory experience on ACs is associated with the quality of KAMs reported in the extended reports. Our results are robust to alternative sampling, model specifications, and endogeneity concerns.

Keywords: Audit committee; Accounting experience; Key audit matters; Extended audit reporting (search for similar items in EconPapers)
JEL-codes: G34 M41 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11156-024-01276-2

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