Key audit matters and big4 auditors in Oman: a quantile approach analysis
Journal of Financial Reporting and Accounting
ISSN: 1985-2517
Article publication date: 8 February 2022
Issue publication date: 20 November 2023
Abstract
Purpose
In response to the users of financial statements’ need for better communication value from audit reports, auditors are required to expand the format and content of their reports. This paper aims to investigate the heterogeneity of key audit matters (KAM) for big4 audit firms.
Design/methodology/approach
Using a pool of 273 year-observations from the Omani capital market for the period 2016–2019, a quantile regression approach is adopted to achieve this purpose because it can provide a broader picture of this heterogeneity.
Findings
The results indicate that all types of big4 audit firms are associated with lower numbers of KAM. However, each big4 audit firm reports these KAM differently. Also, the results indicate heterogeneity in the number of KAM among the partners of each firm. Specifically, partners in some big4 audit firms show a significant association with fewer KAM while others are insignificant. Some partners of Ernst and Young show a positive association with a higher number of KAM. Overall, the results confirm the heterogeneity among auditors in styling their KAM disclosure.
Originality/value
There are crucial implications for various policymakers. This paper is the first to analyse KAM aspects at the partner level and use quantile regression to detect the effect of audit firms on KAM.
Keywords
Acknowledgements
Funding. No grant or fund supporting this research was received at the time of submission.
Conflicts of interest statement. The author declares that he has no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
Availability of data and material. Research data are publicly available in sources identified in the text.
Citation
Baatwah, S.R. (2023), "Key audit matters and big4 auditors in Oman: a quantile approach analysis", Journal of Financial Reporting and Accounting, Vol. 21 No. 5, pp. 1124-1148. https://doi.org/10.1108/JFRA-09-2021-0289
Publisher
:Emerald Publishing Limited
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