Determinants of the Number of Key Audit Matters Disclosed: A Study of Public Health Sector Entities

This study aims to identify the determinants of the number of Key Audit Matters (KAM) disclosed in the audit reports, in the public health sector entities, from 2017 to 2021. Based on panel data, we estimate the fixed effects and random effects models, considering as determining factors the number of qualifications, the number of emphasis of matter, the gender of the auditor, the size of the entity, and the audit firm selected. We conclude that there is a greater disclosure of KAM in audit reports issued by female auditors. However, there is an inverse relationship between the number of qualifications included in the audit report and the number of KAM disclosed. We also found a positive association between the number of emphasis of matter and the number of KAM disclosed, and that the Non-Big5 audit firms disclose less KAM. This investigation makes its contribution to previous literature by identifying and verifying how certain factors influence the number of KAM disclosed in the audit report. In particular, this study distinguishes itself from most studies focused on the number of KAM disclosed by identifying factors that determine the disclosure of KAM in the specific context of Public Interest Entities.