Has Key Audit Matter become standardized? : Comparative study between UK and Swedish mutually owned insurance companies.

Sammanfattning: Background/problematization: Traditionally, the auditor’s report was a short pass-or-fail statement with a few lines of text andstandardized wording. Critics have argued that the auditor’s report was a tedious anduninformative statement, more entity-specific and relevant information was wanted in theauditor’s report. As a result, ISA 701 was implemented in 2016, which required auditors todisclose Key Audit Matters. However, skeptics were concerned that the expanded auditor’sreport following the new regulation ISA 701 would become standardized as well. Purpose: The purpose of this paper is to contribute to the research on whether IAASB has achieved withits intention of ISA 701, to make the auditor’s report provide more entity-specific information,thus increasing the communicative value. By doing this, we also intend to contribute to theunderstanding of the factors that shape the disclosure of audit information. Methodology: The study was based on a positivistic philosophy together with a deductive approach. To collectdata, a quantitative method and a longitudinal design was used. 72 sample companies wereinvestigated over the time period of 2017-2021. This resulted in 359 firm-year observations.The data used was secondary data from annual reports and the database Orbis. The main test ofthe data was done in multiple linear regression models using SPSS. Findings: The findings suggest that there is no systematic standardization on a cross-national level,however there are some indications for standardization of the disclosure of KAMs on thenational level in some cases. We have identified three diving forces of standardization: country-, audit firm-, and auditor effects. Among these driving forces, the country effect was found tobe the strongest driving force.