- 권한신청
- P-ISSN1738-3110
- E-ISSN2093-7717
- SCOPUS
Key Audit Matters Readability and Investor Reaction
Key Audit Matters Readability and Investor Reaction
POONPOOL, Nuttavong (Mahasarakham Business School, Mahasarakham University)
WANGCHAROENDATE, Suwan (Mahasarakham Business School, Mahasarakham University)
BHONGCHIRAWATTANA, Utis (Mahasarakham Business School, Mahasarakham University)
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Abstract
Purpose: This study aimed to examine whether key audit matters (KAMs) readability influences investor reaction. Research design, data, and methodology: The signaling theory was applied to explain the behavior of investors when they receive useful information for their decisions. Data were collected from 1,866 firm-year observations from Thai listed companies in both the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI) for the fiscal years of 2016-2019. The study was based on secondary data, which were collected from the SET Market Analysis and Reporting Tool (SETSMART) database and the Stock Exchange of Thailand's website (www.set.or.th). A statistical regression method was used with panel data analysis to evaluate possible associations between KAMs readability and investor reaction. The study relied on popular readability measures (Fog Index). Moreover, investor reaction was measured by absolute cumulative abnormal return and abnormal trading volume. Results: It was found that the KAMs readability has positive significance on both absolute cumulative abnormal return and abnormal trading volume. Conclusion: This study showed a significant contribution to the implication of KAMs in an emerging economy. The results reveal that more readable KAMs disclosure distributed new insights and useful information to investors and led to reducing the information gap between auditors and investors.
- keywords
- Key Audit Matters, Readability, Investor Reaction, Audit Report Distribution, Emerging Market
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