英文摘要 |
Using data from Taiwanese listing companies whose auditors disclose key audit matters (KAM) in audit reports of 2016 and 2017, this study examines the association between KAM disclosures, audit quality, and audit report timeliness. The extent of KAM disclosures is determined by the number of key audit matters disclosed and the number of words auditors use to explain key audit matters. Audit quality and audit report timeliness are proxied by discretionary accruals and audit report lag, respectively. The empirical results show that KAM disclosures are inversely correlated with discretionary accruals, suggesting that the more key audit matters disclosed and the more detailed explanations provided by auditors, the lower the client’s discretionary accruals. These results indicate that disclosing KAMs helps auditors constrain clients' increasing reported earnings behaviors. Moreover, disclosing KAMs delay the issuance of audit reports. |