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Auditors' response to regulators during COVID-19: disclosures of key audit matters

Elizabeth Rainsbury (School of Applied Business, Unitec Institute of Technology, Auckland, New Zealand)
Saman Bandara (Department of Accountancy, University of Kelaniya, Kelaniya, Sri Lanka) (Unitec Institute of Technology, Auckland, New Zealand)
Ahesha Perera (Massey University Business School, Albany, New Zealand)

Asian Review of Accounting

ISSN: 1321-7348

Article publication date: 22 November 2022

Issue publication date: 9 February 2023




New Zealand regulatory bodies guided preparers and auditors of financial statements to deal with potential COVID-19 impacts on the financial statements and audit procedures. This study provides evidence of auditors' response to the impact of COVID-19 on the reporting of key audit matters (KAMs) in audit reports of listed companies in New Zealand. The purpose of this paper is to address this issue.


A sample of 50 New Zealand listed companies was selected to compare the KAMs in 2019 (pre-COVID-19) and 2020 (during COVID-19). The study uses content analysis to evaluate the KAMs’ disclosures and descriptive analysis to examine the differences between 2019 and 2020 in terms of the auditor type, industry sector and accounting standards.


Auditors responded positively to the request from regulators to communicate the impacts of COVID-19. The findings show an increase in the amount and length of KAMs in 2020 compared to 2019, with 82% of companies and 61% of KAMs reporting the impact of COVID-19. The real estate and information technology sectors disclosed more on the impact than other sectors. In analysing the KAMs, accounting standards for inventories, property plant and equipment, impairment of assets, investment property, revenue from contracts with customers and leases were highly affected by COVID-19.

Practical implications

The findings support regulators to evaluate how well auditors communicated matters relating to COVID-19 in the audit report. Also, the findings will help standard setters to identify key accounting standards affected by COVID-19 of KAMs and provide insights to users on how the KAM reporting enhances communicative value during the pandemic.


The current study captures the impact of COVID-19 on the reporting of KAMs by comparing changes before and during the pandemic.



Rainsbury, E., Bandara, S. and Perera, A. (2023), "Auditors' response to regulators during COVID-19: disclosures of key audit matters", Asian Review of Accounting, Vol. 31 No. 1, pp. 42-56.



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