{"id":133977,"date":"2020-12-15T12:39:23","date_gmt":"2020-12-15T04:39:23","guid":{"rendered":"https:\/\/www.fbe.hku.hk\/event\/do-critical-audit-matter-disclosures-impact-investor-behaviour-by-ms-serene-q-huang\/"},"modified":"2020-12-16T15:59:53","modified_gmt":"2020-12-16T07:59:53","slug":"do-critical-audit-matter-disclosures-impact-investor-behaviour-by-ms-serene-q-huang","status":"publish","type":"event","link":"https:\/\/www.hkubs.hku.hk\/tc\/event\/do-critical-audit-matter-disclosures-impact-investor-behaviour-by-ms-serene-q-huang\/","title":{"rendered":"&#8220;Do Critical Audit Matter Disclosures Impact Investor Behaviour?&#8221; by Ms. Serene Q. Huang"},"content":{"rendered":"<h4>SPEAKER<\/h4>\n<p>Ms. Serene Q. Huang<br \/>\nPh.D. Candidate in Accounting<br \/>\nColumbia Business School<br \/>\nColumbia University<\/p>\n<h4>ABSTRACT<\/h4>\n<p>The Public Company Accounting Oversight Board (PCAOB) has recently required auditors to disclose critical audit matters (CAMs), which are financial statement matters that involve especially challenging, subjective, or complex auditor judgments. The PCAOB contends that CAMs will increase the decision usefulness of the auditor\u2019s report and indirectly benefit investors by increasing audit and financial reporting quality. I examine whether investors react to CAM disclosures and whether they perceive any change in adopting firms\u2019 financial reporting quality. Using a difference-in-differences design, I find that (1) while there is no significant stock return or volume reaction to CAMs on average, investors react negatively to CAMs disclosed by firms with high levels of short interest; (2) there is a significant increase in the quarterly earnings response coefficient for adopting firms. The effect is driven by big-N audit firms, and increases with the number of CAMs reported. Collectively, the evidence suggests that investors use CAMs to confirm their pre-existing opinions about a firm, and that they perceive an improvement in audit quality and financial reporting reliability due to the CAM disclosure requirement.<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"tags":[],"class_list":["post-133977","event","type-event","status-publish","hentry","seminar-categories-accounting-and-law-tc","seminar-types-seminar-tc","event-natures-seminar-calendar","event-natures-sc-accounting-2"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/event\/133977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/event"}],"about":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/types\/event"}],"version-history":[{"count":1,"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/event\/133977\/revisions"}],"predecessor-version":[{"id":133980,"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/event\/133977\/revisions\/133980"}],"wp:attachment":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/media?parent=133977"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/tags?post=133977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}