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This study aims to identify the intellectual structure of expanded audit reporting (EAR), offers a quantitative summation of prominent themes, contributors and knowledge gaps and provides suggestions for further research.

This research uses various bibliometric techniques, including co-word and co-citation analysis for EAR science mapping, based on 123 papers from Scopus Database between 1991 and 2022.

The results show EAR research is focused on Audit Quality; Auditor Liability and Litigation; Communicative Value and Readability; Audit Fees; and Disclosure. Regarding EAR research, Brasel et al. (2016), article is the most cited paper, Bédard J. is the most cited author, Laval University is the most influential university, The Accounting Review is the most cited journal and USA is the leading country. Furthermore, the results show that in common law countries, in which shareholder rights and litigation risk is high, topics such as disclosure quality and audit litigation have been addressed more; and in civil legal system countries, which usually favor stakeholders’ rights, topics of gender diversity or corporate governance have been more studied.

This research has practical implications for standard setters and regulators, who can identify important, overlooked and emerging issues and consider them in future policies and standards.

This paper contributes to the literature by providing a more objective and comprehensive status of the accounting research on EAR, identifying the gaps in the literature and proposing a direction for future research to continue the discussion on the value-relevance of EAR to achieve more transparency and less audit expectation gap.

This study aims to examine whether audit partners’ gender affects the year-to-year changes (year-to-year additions and drops) of key audit matters (KAMs) identified in the audit report. This study also examines whether female audit partners’ audit experiences, accounting education and narcissism reduce the difference in time variances of KAMs reporting between female and male audit partners. This study defines the year-to-year additions and drops of KAMs as the time variance of KAMs.

Data of this study includes the audit reports of Australian Securities Exchange 300 companies for the period from 2017 to 2021. This study also applies the theory of female auditors’ preference for anchoring and availability heuristics. This study uses multivariate regression with robust standard errors clustered by the firms. This study also uses several robustness tests.

The findings suggest that female audit partners disclose fewer time variant KAMs in that they have a lower tendency both to add new KAMs and to drop old KAMs. Further analysis suggests that the differences between female and male audit partners decrease as the female audit partners’ experience increases or if the female audit partner possesses a bachelor’s degree in accounting. Female audit partners’ narcissism also reduces the gender gap in the time variances of KAMs.

The fact that female audit partners report more stable KAMs implies that there are differences between female and male audit partners in the way audit risk assessments are conducted, audits are planned and professional judgement is applied by female and male audit partners.

The findings imply that female audit partners’ experience, accounting education and narcissistic personality can play a significant role in explaining the differences in audit outcomes produced by male and female audit partners.

This study is novel in showing that female audit partners report more stable and less time-variant KAMs. The findings of this study may inform audit firms and regulators that female audit partners’ experience, tertiary qualifications in accounting and narcissistic personality traits may be effective means of reducing the gender gap in auditing. The findings also imply that auditors’ observable and unobservable personality traits affect audit outcomes.

This study investigates the consequences of the key audit matter (KAM) disclosure requirement by considering two salient audit proxies: audit fees and audit report lag. This investigation is relevant because most auditors worldwide are required to expand their audit report including discussion on key matters faced in the audit engagement. However, the emerging literature on the implications of KAM is inconclusive.

Using a distinctive dataset of 601 year-observations for firms listed on the Omani capital market over 2012–2019, this study employs pooled panel data regression with robust standard error.

Results indicate that auditors increased their fees considerably during the period of KAM but substantially shortened audit report lag. Conversely, using the KAM period as a sample, the authors find marginal or insignificant evidence for the effect of the number of KAM on both proxies. In additional analyses, this study shows that entity-level risk KAM is associated with higher fees and shorter audit report lag, while KAM related to account-level risk does not have the same effect. Interestingly, it is observed that KAM disclosure is strongly associated with higher fees and high-quality audit even when the auditors issue their report in a shorter time.

This study contributes to the limited research examining the consequences of KAM in emerging markets. It is also the first to show that KAM is associated with shorter audit report lag.

In response to the users of financial statements’ need for better communication value from audit reports, auditors are required to expand the format and content of their reports. This paper aims to investigate the heterogeneity of key audit matters (KAM) for big4 audit firms.

Using a pool of 273 year-observations from the Omani capital market for the period 2016–2019, a quantile regression approach is adopted to achieve this purpose because it can provide a broader picture of this heterogeneity.

The results indicate that all types of big4 audit firms are associated with lower numbers of KAM. However, each big4 audit firm reports these KAM differently. Also, the results indicate heterogeneity in the number of KAM among the partners of each firm. Specifically, partners in some big4 audit firms show a significant association with fewer KAM while others are insignificant. Some partners of Ernst and Young show a positive association with a higher number of KAM. Overall, the results confirm the heterogeneity among auditors in styling their KAM disclosure.

There are crucial implications for various policymakers. This paper is the first to analyse KAM aspects at the partner level and use quantile regression to detect the effect of audit firms on KAM.

This rich descriptive study examines auditors' client risk assessment (i.e. “key audit matters”/critical audit matters) disclosures in expanded audit reports of 328 Financial Times Stock Exchange (FTSE) 350 companies. The study compares auditor-identified client risks with corporate risk disclosures identified in audit committee reports, in terms of number and type of risks. The research also compares variation in auditor-identified client risks between individual Big 4 audit firms. In addition, the study examines auditor ranking of their client risks disclosed.

The study manually content analyses disclosures in audit reports and audit committee reports of a sample of 328 FTSE-350 companies with 2015 year-ends.

Audit committees identify more risks than auditors (23% more risks). However, auditor-identified client risks and audit-committee-identified risks are similar (80% similar), as are auditor-identified client risks between the individual Big 4 audit firms. Only ten (3%) audit reports rank the importance of auditor-identified client risks.

Sample is restricted to one year, one jurisdiction, large-listed companies and companies audited by Big 4 auditors.

The study provides important insights for regulators, auditors and users of financial statements by identifying influences on disclosure of auditor-identified client risks.

The paper mobilises institutional theory to interpret the findings. The findings suggest that auditor-identified client risks in expanded audit reports may demonstrate mimetic behaviour in terms of similarity with audit-committee-identified risks and similarity between individual Big 4 audit firms. The study provides important insights for regulators, auditors and users of financial statements by identifying influences on disclosure of auditor-identified client risks.

This paper aims to investigate the impact of the implementation of the critical audit matters (CAMs) disclosure requirement and the subsequent relationship between CAM disclosures and audit report lag, as well as audit fees in the USA.

This study used difference-in-differences analyses to investigate the impact that the implementation of the requirement for auditors to report CAMs on their audit report has on the audit process. It also used levels regression models to examine the relationship that CAM disclosures have with audit report lag and audit fees.

This study found that the implementation of the CAM disclosure requirement in the USA reduced audit report lag while not significantly affecting audit fees. This suggests that the CAM disclosure requirement may increase the cooperation between auditors and managers and improve the efficiency of the audit process.

This study’s results are informative for assessing the economic impact of requiring CAM disclosures, which should be of importance to regulators, auditors and accounting researchers.

This study used different approaches to investigate two aspects of the CAM disclosure requirement – the effect of the implementation of the disclosure requirement and the subsequent effects related to CAM reporting outcomes. Unlike many previous studies investigating CAM disclosures, which relied on experiments and questionnaires, this study used actual CAM disclosure data in the USA to investigate the impact on audit report lag and audit fees.

This study aims to examine whether and how the experience of specialized external governance mechanisms mandated by the Employee Retirement Income Security Act of 1974 – the actuary and auditor – affect pension plan funding.

This study uses data from annual pension plan regulatory reports (Form 5500), Form 10-K filings, Form DEF 14A filings (company proxy statements) and publicly available data sources. The hand-collected data include information related to the pension plan’s actuary and auditor and various pension plan data disclosed in the company’s financial statement footnotes.

The author finds that more experienced actuaries and auditors are associated with better funded pension plans, especially when the company has higher financial risk or lower board independence. Additional analyses indicate that companies with more experienced actuaries and pension plan auditors are more likely to make higher annual pension plan contributions and hold fewer Level 3 fair value assets.

The dearth of pension plan governance research generally focuses on whether and how internal governance mechanisms affect pension plan funding. To the best of the author’s knowledge, this is the first empirical study of the relationship between external pension plan governance mechanisms and pension plan funding.

The purpose of this study is to construct and test a new measure of auditor orientation using two audit quality-related tasks.

The sample consists of 66 Dutch and US graduate auditing students. Participants complete two tasks: one involving a lease classification and another, supplemental experiment involving a contingent liability judgment. The purpose is to construct a new measure for rules-based/ principles-based orientation. Rigorous, psychometric testing confirms that parts of tolerance for ambiguity (TOA) and need for cognition (NFC), together, form a new construct the authors identify as auditor orientation. The authors next conduct a main and supplemental experiment with novice auditor participants from both the USA and the Netherlands.

The authors begin with rigorous, psychometric testing using participants from the USA and the Netherlands. The resulting 10-item scale combines parts of TOA and NFC to reflect auditor orientation. The common themes across scale items are high (low) adaptability to complexity and a substance-over-form (form-over-substance) preference for principles-oriented (PO) (rules-oriented [RO]) auditors. Conducting two experiments, results from two distinct tasks confirm our research question; novice auditors classified as RO (PO) are more (less) likely to recommend a more aggressive/client-favorable disclosure judgment.

Auditor orientation (i.e. rules or principles) has a significant impact on the application of rules-based or principles-based standards. How the standards are applied, therefore, influences auditor decision-making and thus audit quality. However, there is a paucity of auditor orientation research to date, including a validated measure. The study contributes a new measure for future research in the related accounting standards and audit quality literatures, while also identifying a potentially important construct in auditor training.

In this study, the authors investigate a pressing concern: how auditors react to their clients facing repercussions due to environmental violations. More specifically, this study aims to examine how environmental engagements, which carry potential risks and liabilities, influence auditors’ decision-making and fee structure.

This study uses unique, reliable and actual violation data from the United States Environmental Protection Agency (US-EPA) from 2000 to 2015, focusing on clients involved in environmental violations that led to legal prosecution and penalties and those who subsequently engaged in voluntary supplemental environmental projects (SEPs). The authors use the ordinary least squares method to test the authors’ main research question and later use propensity score matching and alternate data source (ASSET4) to check the robustness of the authors’ results.

The authors find that firms with environmental violations are more susceptible to auditor resignation. Moreover, the environmental violator firms that maintain their engagement with auditors pay significantly higher audit fees compared to non-environmental violator firms. Furthermore, these environmental violator firms also face extended audit report delays and take longer to appoint a new auditor.

This study provides an additional consequence of environmental violations, namely, increased chances of auditor resignation and higher audit fees, alongside the penalties imposed by the US-EPA. Moreover, the authors’ findings position environmental violations and participation in SEPs as important factors in auditors’ business risk assessment.

This study aims to investigate disclosure of asbestos-related liabilities in corporate accounts and counter-accounts to examine whether and how accounting contributes to corporate accountability for asbestos-contaminated products.

This study uses the Goffmanesque perspective on impression management to examine instances of concealed asbestos-related liabilities in corporate accounts vis-à-vis the revealing of such liabilities in counter-accounts.

The findings show counter-accounts provide significant information on liabilities originating from the exposure of employees and consumers to asbestos. By contrast, the malleability of accounting tools enables companies to eschew accounting disclosures. While the frontstage positive performance of companies served an impression management role, their backstage concealing actions enabled companies to cover up asbestos-related liabilities. These companies used three categories of mechanisms to avoid disclosure of asbestos-related liabilities: concealing via a “cloak of competence”, impression management via epistemic work and a silent strategy of concealment frontstage with strategic reorganisation backstage.

This study has policy relevance as regulators need to consider the limits of corporate disclosures as an accountability tool. The findings may also initiate academic and practitioner conversations about accounting standards for long-term liabilities.

This study highlights the strategies companies use both frontstage and backstage to avoid disclosing asbestos-related liabilities. Through analysis of accounts and counter-accounts, this study identifies the limits of accounting as an accountability tool regarding asbestos-induced diseases and deaths.