nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2022‒07‒25
three papers chosen by

  1. The informative value of Key Audit Matters in the audit report. By Nicolás Gambetta; Laura Sierra García; María Antonia García Benau; Josefina Novejarque Civera
  2. Les caractéristiques des comités d'audit : Déterminants de la performance financière et de la qualité informationnelle ? By Ilyass Chaker
  3. Systematizing Macroframework Forecasting: High-Dimensional Conditional Forecasting with Accounting Identities By Mr. Sakai Ando; Mr. Taehoon Kim

  1. By: Nicolás Gambetta (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Finanzas); Laura Sierra García (Universidad Pablo de Olavide); María Antonia García Benau (Universidad de Valencia); Josefina Novejarque Civera (ESIC Business & Marketing School)
    Abstract: This paper examines whether the readability (and hence informative value) of Key Audit Matters (KAM) varies according to the audit firm and the KAM type disclosed, thus providing stakeholders with different information quality for effective decision making. Our analysis shows that the informative value of published descriptions of KAM matter and KAM audit procedures varies according to the audit firm responsible. This informative value also depends on whether the KAM concerns entity-level or accounting-level risks. This study contributes to stakeholder theory and to the literature on audit report quality by showing how the characteristics of the audit firm and the type/content of KAM presented impact on the informative value of the expanded audit report. Furthermore, we suggest that audit firms may increase or decrease the informative value of the audit report according to the type of KAM disclosure made.
    Keywords: audit quality, audit expectation gap, audit report, key audit matter, readability
    JEL: M42
    Date: 2022–01
  2. By: Ilyass Chaker (UT - Université de Tours, VALLOREM - Val de Loire Recherche en Management - UT - Université de Tours - UO - Université d'Orléans)
    Abstract: The proliferation of financial scandals over the past decades has spread doubts upon the quality of financial information and financial performance, leading in return to a greater codification of the rules of good governance which now require the establishment of audit committees within firms calling on public savings. The audit committee which is as an advisory body emanates from the board of directors and is in charge of improving the quality of accounting information as well as financial performance. Our work aims to explain through a quantitative study, based on a sample of 89 non-financial companies from the SBF 120 during the period 2015-2018, the impact of the characteristics of audit committees (independence, expertise, involvement, size, gender diversity) on the quality of information. as well as the financial performance of organizations. Our investigation supports that the size of the audit committee negatively impacts the quality of financial information, while the independence of the audit committee members negatively influences the financial performance of organizations.
    Abstract: La prolifération des scandales financiers durant les dernières décennies a semé les doutes quant à la qualité de l'information comptable et à la performance financière. Cela a engendré en retour une codification plus accrue des règles de bonne gouvernance. Elles obligent, désormais, la mise en place des comités d'audit au sein des firmes faisant appel à l'épargne publique. Le comité d'audit, en tant qu'organe consultatif qui émane du conseil d'administration, a pour mission d'améliorer la qualité de l'information comptable ainsi que la performance financière. Notre travail ambitionne d'expliquer par le biais d'une étude quantitative, basée sur un échantillon composé de 89 sociétés non-financières du SBF 120 durant la période 2015-2018, l'effet des caractéristiques des comités d'audit (indépendance, expertise, implication, taille, diversité du genre) sur la qualité de l'information comptable ainsi que la performance financière des organisations. Nous montrons que la taille des comités d'audit impacte négativement la qualité de l'information comptable, tandis que l'indépendance des administrateurs des comités d'audit influence négativement la performance financière des organisations.
    Keywords: Audit committee,Corporate governance,Quality of accounting and financial information,Financial performance,Comité d'audit,Gouvernance d'entreprise,Qualité de l'information comptable et financière,Performance financière
    Date: 2022–05–24
  3. By: Mr. Sakai Ando; Mr. Taehoon Kim
    Abstract: Forecasting a macroframework, which consists of many macroeconomic variables and accounting identities, is widely conducted in the policy arena to present an economic narrative and check its consistency. Such forecasting, however, is challenging because forecasters should extend limited information to the entire macroframework in an internally consistent manner. This paper proposes a method to systematically forecast macroframework by integrating (1) conditional forecasting with machine-learning techniques and (2) forecast reconciliation of hierarchical time series. We apply our method to an advanced economy and a tourism-dependent economy using France and Seychelles and show that it can improve the WEO forecast.
    Keywords: Macroframework; Conditional Forecasting; Reconciliation; Accounting Identities; Hierarchical Time Series
    Date: 2022–06–03

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.