The impact of the precision of accounting standards on the expanded auditor's report in the European Union
Autor(a) principal: | |
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Data de Publicação: | 2020 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/24502 |
Resumo: | One of the most important recent expansions of the auditor’s report within the EuropeanUnion, but also in the International Standards on Auditing, is the mandatory disclosure ofkey audit matters (KAMs). This paper investigates whether or not the likelihood of a KAMdepends upon the level of precision and detail of an accounting standard. We use the Rules-Based Characteristics (RBC) score of Mergenthaler (2009) validated in Donelson, McInnies,and Mergenthaler (2012) to determine whether an accounting standard is more precise,i.e., whether the accounting standard is more rules-based. We also analyze the impact ofaccounting standard precision on the readability of the auditor’s report. The sample consistsof FTSE 100 (UK), CAC 40 (France), and AEX 25 (Netherlands) companies that disclosedKAMs in 2016. The findings show that the probability of a KAM increases with more preciseaccounting standards. Our results also show that the disclosure of KAMs that are basedon accounting standards with higher rules-based characteristics decreases the readabilityof auditors’ reports. This paper contributes to the literature by showing how accountingstandard precision interacts with the auditor’s report from the point of view of the preparer(auditor) and of the user of the report |
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The impact of the precision of accounting standards on the expanded auditor's report in the European UnionKey Audit MattersAuditor ReportPrinciples-BasedRules-BasedReadabilityOne of the most important recent expansions of the auditor’s report within the EuropeanUnion, but also in the International Standards on Auditing, is the mandatory disclosure ofkey audit matters (KAMs). This paper investigates whether or not the likelihood of a KAMdepends upon the level of precision and detail of an accounting standard. We use the Rules-Based Characteristics (RBC) score of Mergenthaler (2009) validated in Donelson, McInnies,and Mergenthaler (2012) to determine whether an accounting standard is more precise,i.e., whether the accounting standard is more rules-based. We also analyze the impact ofaccounting standard precision on the readability of the auditor’s report. The sample consistsof FTSE 100 (UK), CAC 40 (France), and AEX 25 (Netherlands) companies that disclosedKAMs in 2016. The findings show that the probability of a KAM increases with more preciseaccounting standards. Our results also show that the disclosure of KAMs that are basedon accounting standards with higher rules-based characteristics decreases the readabilityof auditors’ reports. This paper contributes to the literature by showing how accountingstandard precision interacts with the auditor’s report from the point of view of the preparer(auditor) and of the user of the reportElsevierRepositório da Universidade de LisboaPinto, InêsMorais, AnaQuick, Reiner2022-06-08T10:36:57Z20202020-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/24502engPinto, Inês; Ana Morais and Reiner Quick. (2020). “The impact of the precision of accounting standards on the expanded auditor's report in the European Union” . Journal of International Accounting, Auditing and Taxation, Vol. 40, pp. 100333info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:54:08Zoai:www.repository.utl.pt:10400.5/24502Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:08:32.016836Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union |
title |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union |
spellingShingle |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union Pinto, Inês Key Audit Matters Auditor Report Principles-Based Rules-Based Readability |
title_short |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union |
title_full |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union |
title_fullStr |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union |
title_full_unstemmed |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union |
title_sort |
The impact of the precision of accounting standards on the expanded auditor's report in the European Union |
author |
Pinto, Inês |
author_facet |
Pinto, Inês Morais, Ana Quick, Reiner |
author_role |
author |
author2 |
Morais, Ana Quick, Reiner |
author2_role |
author author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Pinto, Inês Morais, Ana Quick, Reiner |
dc.subject.por.fl_str_mv |
Key Audit Matters Auditor Report Principles-Based Rules-Based Readability |
topic |
Key Audit Matters Auditor Report Principles-Based Rules-Based Readability |
description |
One of the most important recent expansions of the auditor’s report within the EuropeanUnion, but also in the International Standards on Auditing, is the mandatory disclosure ofkey audit matters (KAMs). This paper investigates whether or not the likelihood of a KAMdepends upon the level of precision and detail of an accounting standard. We use the Rules-Based Characteristics (RBC) score of Mergenthaler (2009) validated in Donelson, McInnies,and Mergenthaler (2012) to determine whether an accounting standard is more precise,i.e., whether the accounting standard is more rules-based. We also analyze the impact ofaccounting standard precision on the readability of the auditor’s report. The sample consistsof FTSE 100 (UK), CAC 40 (France), and AEX 25 (Netherlands) companies that disclosedKAMs in 2016. The findings show that the probability of a KAM increases with more preciseaccounting standards. Our results also show that the disclosure of KAMs that are basedon accounting standards with higher rules-based characteristics decreases the readabilityof auditors’ reports. This paper contributes to the literature by showing how accountingstandard precision interacts with the auditor’s report from the point of view of the preparer(auditor) and of the user of the report |
publishDate |
2020 |
dc.date.none.fl_str_mv |
2020 2020-01-01T00:00:00Z 2022-06-08T10:36:57Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/24502 |
url |
http://hdl.handle.net/10400.5/24502 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Pinto, Inês; Ana Morais and Reiner Quick. (2020). “The impact of the precision of accounting standards on the expanded auditor's report in the European Union” . Journal of International Accounting, Auditing and Taxation, Vol. 40, pp. 100333 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Elsevier |
publisher.none.fl_str_mv |
Elsevier |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799131179501223936 |