Dynamics of disclosure of key audit issues in Brazil and Portugal
DOI:
https://doi.org/10.16930/2237-766220253532Keywords:
Key Audit Matters, Informational Content, TrendAbstract
The study analyzes the Key Audit Matters (KAM) reported by independent auditors in non-financial companies listed on the Brazilian Stock Exchange and Euronext Lisbon from 2016 to 2021. For this purpose, a sample of 460 companies was used, and content analysis was performed on 4.733 KAM from 1.775 Independent Audit Reports (IAR), categorizing them at the lowest possible level: i) 25 items from Ibracon (2017; 2018); ii) 6 classes from ACCA (2018); and iii) 2 risk items from Sierra-García et al. (2019) and Lennox et al. (2022). Additionally, through descriptive analysis, the total number of KAM was examined by year, sector, audit firm, life cycle, and addition/elimination. The results indicate: an average of 3 KAM per company; an increase from 2016 to 2017 and a decline from 2017 to 2021, implying more eliminations than additions annually; the big four audited the majority of the sample; more KAM were reported in companies in the maturity phase of their life cycle; and the content was predominantly about financial statement risks. These findings help stakeholders in the IAR understand that there is a trend in the quantity and informational content of KAM, which are relatively focused on subjective, complex, and challenging financial aspects that require auditor involvement.
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