Key audit matters and restatement of financial statements: evidence from an emerging economy
Journal of Financial Reporting and Accounting
ISSN: 1985-2517
Article publication date: 14 October 2024
Abstract
Purpose
This study aims to examine the relationship between key audit matters (KAMs) and the restatement of financial statements, assessing their impact on the financial statement restatement process.
Design/methodology/approach
This study aims to examine the economic context of Vietnam by analyzing data from 170 listed enterprises on the Vietnam stock exchange from 2010–2021. Feasible generalized least squares and robustness regression are conducted to give results and conclusions.
Findings
The results show that the KAMs disclosure in the financial statements has not really significantly affected the quality of an audit, so the KAMs disclosure does not have too much impact on the restatement of financial statements. However, this study found that the number of disclosed KAMs would partly reflect the shortcoming that exists in companies' financial statements.
Practical implications
The authenticity of financial statements is crucial for companies to meet auditor requirements, particularly KAMs. Restatements can influence business decisions and provide more accurate financial information to stakeholders. Thus, studying the impact of KAMs on restatement is essential for improving the veracity and reliability of financial statements.
Originality/value
This study clarifies the important role of KAMs in financial statements to recommend investors to be more careful in considering KAMs disclosed by auditors in audit reports. In addition, this study helps to add an overview of KAMs in emerging markets like Vietnam, as well as helps stakeholders to improve the legal system on Accounting – Auditing in Vietnam.
Keywords
Acknowledgements
Funding: This research is funded by University of Economics and Law, Vietnam National University Ho Chi Minh City, Vietnam.
Conflict of interest disclosure: The authors declare no conflict of interest.
Ethics approval statement: The author adheres to the ethical guidelines required by journal.
Citation
Khuong, N.V., Thi Ngoc Anh, D., Minh Nhu, P., Vu Tran Trong, T., Thi Kieu Trang, N. and Hoang Kha Thy, D. (2024), "Key audit matters and restatement of financial statements: evidence from an emerging economy", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-05-2024-0311
Publisher
:Emerald Publishing Limited
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