An Empirical Analysis of Key Audit Matters in the Financial Industry

86 Pages Posted: 7 May 2019

See all articles by Edgar Loew

Edgar Loew

Frankfurt School of Finance and Management gGmbH

Tim Mollenhauer


Date Written: April 28, 2019


One outcome of the financial crises with regard to financial statements and their audits has been that both, the European Union and the International Auditing and Assurance Standards Board came out with amendments to their legislations. Hence, the regulators focused on the information gap between the auditor and the stakeholders of financial reports. To close that gap, the implementation of Key Audit Matters (KAM) within the section of the independent auditor´s report became mandatory. 2017 marks the first year in which KAM for all European public interest entities (PIE) can be observed. Based on previous literature and few academic studies the following working paper focuses on KAM within European Banks. Basis of the sample are those significant supervised European Banks that are governed by the European Central Bank (ECB), disclosed by the list of supervised entities published by the ECB as of 1st of January 2018. Reported KAM topics are tested on influential factors for KAM such as bank size and complexity, success, earnings management, region or audit company. Furthermore, text similarities are checked, as one of the goals of the new auditor reports was to individualise the reports. This study therefore, provides a deep insight into both, the most relevant topics auditors are dealing with in European Banks and bank specific dependencies and their influence on KAM.

Keywords: Audit,Accounting,Banks,Key Audit Matters,KAM,Bank Accounting

JEL Classification: M41, M42, M48, G18, G28

Suggested Citation

Loew, Edgar and Mollenhauer, Tim, An Empirical Analysis of Key Audit Matters in the Financial Industry (April 28, 2019). European Banking Institute Working Paper Series 2019 – no. 40, Available at SSRN: or

Edgar Loew (Contact Author)

Frankfurt School of Finance and Management gGmbH ( email )

Adickesallee 32-36
Frankfurt am Main, 60322
004915228627120 (Phone)

Tim Mollenhauer

Independent ( email )

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