Investor Reaction to Communicating Key Audit Matters in Auditor’s Reports
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Abstract
The objective of this research is to study the communication of and the investors’ reaction to key audit matters in auditor' s reports including both the number and presentation format of key audit matters. The samples used in the research are listed companies on the Stock Exchange of Thailand and the Market for Alternative Investment during the period of year 2016 - 2019. The research employs multiple regression analysis for hypothesis testing. The results show that most of key audit matters in the auditor’s reports of the samples are presented in descriptive format. An average of key audit matters in the auditor’s reports is 1.86. Most of the issue that is identified in the key audit matters is revenue recognition and asset impairment. The result does not find investor reaction to the number and presentation format of key audit matters. However, when the research takes type of stock exchange variable into the consideration, the result finds the investors negatively react to the number and presentation format of key audit matters in the auditor’s reports of the samples in the Market for Alternative Investment.
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