Graduation Year
2017
Document Type
Dissertation
Degree
Ph.D.
Degree Name
Doctor of Philosophy (Ph.D.)
Degree Granting Department
Business Administration
Major Professor
Lisa Milici Gaynor, Ph.D.
Committee Member
Uday Murthy, Ph.D.
Committee Member
Dahlia Robinson, Ph.D.
Committee Member
Sandra Schneider, Ph.D.
Keywords
Critical Audit Matters, Standard Audit Report, Investor’s Perception, Audit Quality, Support Theory, PCAOB
Abstract
I investigate how nonprofessional investors’ confidence in the financial statements and the audit report is influenced by the firm specific details of a critical audit matter (CAM) disclosure in conjunction with the description of the audit procedures engaged to address the CAM in the audit report. Using participants recruited from Amazon Mechanical Turk as a proxy for nonprofessional investors in a 2x2 +1 (control) between-participants experiment manipulating CAM disclosure detail (Detailed/Generic) and the description of the audit procedures engaged to address the CAM (Detail/Generic) I find that greater detail in the description of the CAM results in higher confidence in the accuracy and reliability of the financial statements than a generic description of the CAM, consistent with boundary condition of Support Theory. Further, I find that greater detail in the description of the related audit procedures engaged to address the CAM increases nonprofessional investors’ perceptions of audit quality. Evidence of an effect of CAM and audit procedure disclosure language on investment judgments is also presented. These results have implications for researchers, practitioners, and regulators to carefully consider the language used to disclose CAMs in the auditor’s report.
Scholar Commons Citation
Kipp, Peter, "The Effect of Expanded Audit Report Disclosures on Users’ Confidence in the Audit and the Financial Statements" (2017). USF Tampa Graduate Theses and Dissertations.
https://digitalcommons.usf.edu/etd/6718
