Litigation Risk and Key Audit Matters Disclosure: Moderating role of board characteristics
DOI:
https://doi.org/10.21834/e-bpj.v10i33.7303Keywords:
Litigation Risk, Key Audit Matters, Board CharacteristicsAbstract
This study investigates the relationship between litigation risk and the disclosure of Key Audit Matters (KAMs) in China, using data from 14,679 non-financial A-share firms from 2017 to 2023. The results indicate that higher litigation risk leads to increased KAM disclosure. Further analysis reveals that certain board characteristics moderate this relationship, with varying effects across different characteristics: board size strengthens it, the proportion of independent directors weakens it, and CEO duality has no significant effect. These findings confirm that KAMs effectively communicate litigation-related risks and underscore the influence of corporate governance on auditors’ reporting behavior.
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