The Impact of Audit Committee Characteristics on the Number, Readability, and Tone of Key Audit Matters in the Audit Report (Business Marketing and Finance Open)

Summary

• The study covers 114 companies and 570 firm-year observations from the Tehran Stock Exchange.p.1
• The mean number of Key Audit Matters is 2.795.p.10
• Audit committee financial expertise has a significant negative relationship with the number of KAMs (coefficient -0.366, p = 0.017).p.14
• Audit committee gender diversity has a significant relationship with audit report readability (coefficient 11.760, p = 0.000).p.15
• Audit committee gender diversity is positively and significantly related to audit reporting tone (coefficient 0.441, p = 0.001).p.16

Key insights

1. Audit committee size is not significantly related to the number of KAMs (coefficient 0.114, p = 0.473).p.14
2. Audit committee independence is not significantly related to the number of KAMs (coefficient 0.185, p = 0.236).p.14
3. Gender diversity has a significant negative relationship with the number of KAMs (coefficient -0.726, p = 0.017).p.14
4. Financial expertise is significantly and positively related to audit report readability (coefficient 2.291, p = 0.032).p.15
5. Independence shows no significant relationship with readability (coefficient 0.036, p = 0.970).p.15
6. Experience has a significant positive relationship with audit reporting tone (coefficient 0.045, p = 0.041).p.16
7. Membership overlap is not significantly related to reporting tone (coefficient 0.028, p = 0.231).p.16