Does the audit committee member’s accounting experience associated with key audit matter types?

Document Type

Article

Source of Publication

Review of Quantitative Finance and Accounting

Publication Date

1-1-2024

Abstract

Using a narrow view of accounting experience, this study examines the relationship between accounting experience on audit committees (ACs) and key audit matters (KAMs) in the UK. In contrast to extant research, this study distinguishes between different types of accounting experience on AC and how this relates to different types of KAMs. We also address the effects of the interplay between accounting and supervisory experiences on KAMs. Using a sample from FTSE 350, we provide robust evidence that accounting experience on ACs is an important driver of extended audit reporting quality. Moreover, we find evidence that different types of accounting experience have mostly similar effects on different types of KAMs. Further, we show that AC members with prior supervisory experience complement the role of accounting experience. Nevertheless, this complementary relationship varies between types of KAMs. Overall, our study offers important insights regarding how accounting and supervisory experience on ACs is associated with the quality of KAMs reported in the extended reports. Our results are robust to alternative sampling, model specifications, and endogeneity concerns.

ISSN

0924-865X

Publisher

Springer Science and Business Media LLC

Keywords

Accounting experience, Audit committee, Extended audit reporting, G34, Key audit matters, M41

Scopus ID

85190146701

Indexed in Scopus

yes

Open Access

no

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