The DOI matches its Crossref record; 29 of the 29 references it cites were found in a registry or an index.
Do Critical Audit Matter Paragraphs in the Audit Report Change Nonprofessional Investors' Decision to Invest?
Open accessAbstract
SUMMARY: Both U.S. and international standard setters have recently proposed changes to the standard audit report, including a requirement to include a critical audit matter (CAM) paragraph. We examine how nonprofessional investors react to an audit report's CAM paragraph that is centered on the audit of fair value estimates. We perform an experiment with nonprofessional investors who are business school graduates who invest in individual stocks and analyze company financial data. We find that investors who receive a CAM paragraph are more likely to change their investment decision than are investors who receive a standard audit report (an information effect) or investors who receive the same CAM paragraph information in management's footnotes (a source credibility effect). We also find that the effect of a CAM paragraph is reduced when it is followed by a paragraph offering resolution of the critical audit matter. Our findings should be of interest to regulators and standard setters as they consider the feasibility of CAM paragraphs and whether and how to convey the resolution of critical audit matters.
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Cites
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Cited by
Consequences of adopting an expanded auditor’s report in the United Kingdom
Gutierrez, E., Minutti-Meza, M., Tatum, K. W., & Vulcheva, M. (2018) · Review of Accounting Studies · doi:10.1007/s11142-018-9464-0 · Cited by 382
Sirois, L.-P., Bédard, J., & Bera, P. (2018) · Accounting Horizons · doi:10.2308/acch-52047 · Cited by 322
Andreicovici, I., Jeny, A., & Lui, D. (2025) · The Accounting Review · doi:10.2308/tar-2020-0437 · Cited by 8
Elmahgoub, M., Smith, J. A., Elamer, A. A., & Abdelfattah, T. (2025) · International Journal of Accounting & Information Management · doi:10.1108/ijaim-11-2024-0441 · Cited by 7
Expanded audit report and the value relevance of goodwill impairment
Elmahgoub, M., Smith, J. A., Elamer, A. A., & Abdelfattah, T. (2026) · Journal of Accounting Literature · doi:10.1108/jal-01-2025-0041 · Cited by 2
Metadata
- Authors
- Christensen, B. E., Glover, S. M., & Wolfe, C. J.
- Venue
- AUDITING: A Journal of Practice & Theory
- Publisher
- American Accounting Association
- Published
- 2014-04-01
- Volume
- 33
- Issue
- 4
- Pages
- 71-93
- ISSN
- 0278-0380 (ISSN-L)
- 1558-7991
- OpenAlex
- W3123083350
- Cited by
- 322
- References
- 29
- FWCI
- 39.87
- Type
- journal article
- Language
- en
- Open access
- green
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
