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Critical Audit Matters Requirements And Auditor Reporting Behavior: Early U.S. Evidence, Valbona Sulcaj
Critical Audit Matters Requirements And Auditor Reporting Behavior: Early U.S. Evidence, Valbona Sulcaj
Theses and Dissertations--Accountancy
In this study, I examine two research questions related to the reporting requirements of critical audit matters (CAMs) introduced in the Audit Standard (AS) 3101. First, I examine whether auditor’s perceived litigation risk and client’s financial reporting quality are associated with the number and textual attributes of CAMs. Second, I examine whether the number and textual attributes of CAMs are associated with audit effort and costs.
Consistent with the litigation hypothesis (Skinner, 1994), I find a positive association between litigation risk and the number of CAMs in the audit report, suggesting that auditors try to preempt negative consequences from shareholder …