Key Audit Matters and their Impact on the Financial Statements of Listed Entities
This research examines how the implementation of International Auditing Standard 701 - Communicating Key Audit Matters in the Independent Auditor’s Report (ISA 701), introduced by the International Auditing and Assurance Standards Board (IAASB) in 2015 and mandatory since December 2016, affects the...
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| Format: | Article |
| Language: | English |
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Chamber of Financial Auditors of Romania
2025-02-01
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| Series: | Audit Financiar |
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| Online Access: | http://revista.cafr.ro/temp/Article_9791.pdf |
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| _version_ | 1823860336862691328 |
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| author | Daniel BOTEZ Oana-Ancuta STANGACIU Anatol MELEGA Mihaela ENACHI |
| author_facet | Daniel BOTEZ Oana-Ancuta STANGACIU Anatol MELEGA Mihaela ENACHI |
| author_sort | Daniel BOTEZ |
| collection | DOAJ |
| description | This research examines how the implementation of International Auditing Standard 701 - Communicating Key Audit Matters in the Independent Auditor’s Report (ISA 701), introduced by the International Auditing and Assurance Standards Board (IAASB) in 2015 and mandatory since December 2016, affects the transparency and integrity of financial reports of companies listed on the Bucharest Stock Exchange (BSE). ISA 701 encourages more effective communication of key audit matters, emphasizing their importance in strengthening the quality of statutory audit. This study focuses on how these key matters are identified and communicated in the audit reports and on their impact on investor behavior and management decisions. The paper had as starting point 83 entities listed on the Bucharest Stock Exchange, and following the application of strict criteria, in order to ensure the relevance and comparability of information, the sample was reduced to 40 entities for which the trends in presentation of key audit matters between 2020 and 2022 were analyzed. The results suggest a significant link between the clarity and breadth of communication of these matters and strategic management decisions, which are directly reflected in the financial evolution of companies. This analysis contributes to the literature by highlighting the role of effective communication of key audit matters in promoting transparency and accountability within listed entities, highlighting the positive potential for investor confidence and capital market stability. |
| format | Article |
| id | doaj-art-45dc999b257a48d2b2080f9b3a3cf454 |
| institution | Kabale University |
| issn | 1583-5812 1844-8801 |
| language | English |
| publishDate | 2025-02-01 |
| publisher | Chamber of Financial Auditors of Romania |
| record_format | Article |
| series | Audit Financiar |
| spelling | doaj-art-45dc999b257a48d2b2080f9b3a3cf4542025-02-10T15:24:08ZengChamber of Financial Auditors of RomaniaAudit Financiar1583-58121844-88012025-02-01231(177)16417910.20869/AUDITF/2025/177/004Key Audit Matters and their Impact on the Financial Statements of Listed EntitiesDaniel BOTEZ0Oana-Ancuta STANGACIU1Anatol MELEGA2Mihaela ENACHI3“Vasile Alecsandri” University of Bacau, Romania, Faculty of Economic Sciences“Vasile Alecsandri” University of Bacau, Romania, Faculty of Economic Sciences“Stefan cel Mare” University of Suceava, Romania, Faculty of Economics“Vasile Alecsandri” University of Bacau, Romania, Faculty of Economic SciencesThis research examines how the implementation of International Auditing Standard 701 - Communicating Key Audit Matters in the Independent Auditor’s Report (ISA 701), introduced by the International Auditing and Assurance Standards Board (IAASB) in 2015 and mandatory since December 2016, affects the transparency and integrity of financial reports of companies listed on the Bucharest Stock Exchange (BSE). ISA 701 encourages more effective communication of key audit matters, emphasizing their importance in strengthening the quality of statutory audit. This study focuses on how these key matters are identified and communicated in the audit reports and on their impact on investor behavior and management decisions. The paper had as starting point 83 entities listed on the Bucharest Stock Exchange, and following the application of strict criteria, in order to ensure the relevance and comparability of information, the sample was reduced to 40 entities for which the trends in presentation of key audit matters between 2020 and 2022 were analyzed. The results suggest a significant link between the clarity and breadth of communication of these matters and strategic management decisions, which are directly reflected in the financial evolution of companies. This analysis contributes to the literature by highlighting the role of effective communication of key audit matters in promoting transparency and accountability within listed entities, highlighting the positive potential for investor confidence and capital market stability.http://revista.cafr.ro/temp/Article_9791.pdfkey audit matters (kam)financial statementstransparencyauditor’s opinionmanagement decisionsinvestors’ confidence |
| spellingShingle | Daniel BOTEZ Oana-Ancuta STANGACIU Anatol MELEGA Mihaela ENACHI Key Audit Matters and their Impact on the Financial Statements of Listed Entities Audit Financiar key audit matters (kam) financial statements transparency auditor’s opinion management decisions investors’ confidence |
| title | Key Audit Matters and their Impact on the Financial Statements of Listed Entities |
| title_full | Key Audit Matters and their Impact on the Financial Statements of Listed Entities |
| title_fullStr | Key Audit Matters and their Impact on the Financial Statements of Listed Entities |
| title_full_unstemmed | Key Audit Matters and their Impact on the Financial Statements of Listed Entities |
| title_short | Key Audit Matters and their Impact on the Financial Statements of Listed Entities |
| title_sort | key audit matters and their impact on the financial statements of listed entities |
| topic | key audit matters (kam) financial statements transparency auditor’s opinion management decisions investors’ confidence |
| url | http://revista.cafr.ro/temp/Article_9791.pdf |
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