Goodwill impairment and key audit matters

Inês Gonçalves, Ana Isabel Morais and Inês Pinto

Cogent Business & Management, 2023, vol. 10, issue 2, 2207877

Abstract: The main goal of this paper is to analyze the factors that influence the auditor’s decision to disclose goodwill impairment as a key audit matter (KAM). For this analysis, we use a logit model to determine the factors that influence auditors’ disclosure of a goodwill impairment as a KAM. Our sample comprises 92 companies listed in the stock market indices of Germany (DAX 30), Belgium (BEL 20), Spain (IBEX 35), France (CAC 40), the Netherlands (AEX), and Portugal (PSI 20) as of the 2017 fiscal year-end. The results show that in highly profitable companies or in those with strong corporate governance, the auditor is less likely to disclose goodwill impairment as a KAM. Findings also show that the economic significance of goodwill holds significant influence over the auditor’s decision-making even in companies with strong governance structures. The contribution of this paper is the provision of direct evidence on what motivates auditors to disclose goodwill impairment as a KAM. Findings show a direct relationship between profitability, corporate governance, and the disclosure of goodwill impairment as a KAM.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/23311975.2023.2207877 (text/html)
Access to full text is restricted to subscribers.

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:taf:oabmxx:v:10:y:2023:i:2:p:2207877

Ordering information: This journal article can be ordered from
http://cogentoa.tandfonline.com/journal/OABM20

DOI: 10.1080/23311975.2023.2207877

Access Statistics for this article

Cogent Business & Management is currently edited by Len Tiu Wright and Tahir Nisar

More articles in Cogent Business & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().