Melbourne Accounting Research Seminar - Professor Neil Fargher

Melbourne Accounting Research Seminar

Deans Boardroom, level 12, The Spot
198 Berkeley St, Carlton


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Mario Schabus

T: +61 3 8344 0218

Professor Neil Fargher from the Australian National University will present a MARS seminar.

Topic: Benefits and Costs of the Enhanced Auditor’s Report: Evidence from Australia

Abstract: The Australian Auditing and Assurance Standards Board (AUASB) issued revised auditor reporting standards requiring auditors to provide enhanced auditors’ reports for financial periods ending on or after 15 December 2016. This research provides initial evidence on the impact of the new reporting regime on audit quality and audit fees for the first release of enhanced auditors’ reports.  We do not find consistent evidence of an improvement in audit quality. We find no evidence of increased audit fees. Additional analysis suggests that most of the issues raised in the Key Audit Matters (KAMs) section have already been disclosed in the previous years’ annual reports or are related to known transactions in the current year, suggesting that a majority of the KAMs do not provide any new information to improve the quality of financial reporting.