Does Discussing Audit Procedures in Critical Audit Matter Calibrate Financial Reporting Risk Assessments?
通过控制实验，研究了审计报告中关键审计事项段落讨论审计程序是否能让专业用户校准财务报告风险评估，减少风险事件前后的评估波动。
SYNOPSIS We examine in a controlled experiment whether discussing audit procedures that address a complex investment valuation issue in the critical audit matter (CAM) paragraph of the auditor’s report calibrates sophisticated users’ financial reporting risk (FRR) assessments. Our findings support this calibrating effect, that is, minimizing shifts in their risk assessments before versus after the realization of the risk event (i.e., a significant decline in the fair value of investments pre-empted earlier in the CAM disclosures). Minimizing large swings in users’ risk perceptions is an important consideration to the profession to minimize negative surprises and audit litigation. Our results support standard-setters’ views that discussing audit procedures in the CAM disclosures is value adding in calibrating sophisticated users’ FRR assessments. Data Availability: Data are available from the authors on request. JEL Classifications: D81; M42.