Assessing the Impact of the New Auditor's Report
34 Pages Posted: 12 Feb 2018
Date Written: February 8, 2018
Changes to the auditor’s report have been proposed and issued internationally to provide more relevant information to users and enhance the perceived value of financial statement audits. This study investigates the impact of audit reporting changes on audit quality and audit fees in the New Zealand context. The new and revised audit reporting standards became effective for listed company financial statement audits in New Zealand on or after 15th December 2016. Our evidence suggests they were followed by an improvement in audit quality as proxied by a reduction in absolute abnormal accruals upon the adoption of the new audit reporting requirements. There was also a significant increase in audit fees. Although the new auditor reporting requirements are associated with improvements in audit quality, such benefit does not come without cost.
Keywords: Auditing, audit report, enhanced audit report, key audit matters, partner signature
JEL Classification: G18, G28, L38, L84, L89, M42
Suggested Citation: Suggested Citation