Dependent |
Earnings per share forecast |
EPSf |
Consensus on the mean quarterly earnings expected per share according to data from the I/B/E/S Earnings Consensus Information |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas., 2007Martinez, A. L. (2007). Otimismo e viés de seleção dos analistas. BBR - Brazilian Business Review, 4(2), 104-118.) |
NA |
Forecast error |
EEPSf |
Difference between the actual earnings and the analysts’ forecasted earnings per share divided by actual earnings (modulus) [(EPS - EPSf)/│EPS│] |
Dalmácio et al. (2013Dalmácio, F. Z., Lopes, A. B., Rezende, A. J., & Sarlo Neto, A. (2013). Uma análise da relação entre governança corporativa e acurácia das previsões dos analistas do mercado brasileiro. RAM - Revista Administração Mackenzie, 14(5), 104-139. ), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas., 2007Martinez, A. L. (2007). Otimismo e viés de seleção dos analistas. BBR - Brazilian Business Review, 4(2), 104-118.) |
NA |
Accuracy of the forecast |
AEPSf |
Absolute difference (modulus) between the analysts’ forecast consensus and the actual earnings per share, weighted by the lagged share price (t-1). [│ (EPSf - EPS) │/ share price] |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas., 2007Martinez, A. L. (2007). Otimismo e viés de seleção dos analistas. BBR - Brazilian Business Review, 4(2), 104-118.) |
NA |
Interest |
Total number of KAMs reported |
QKAM |
Logarithm of the quantity of KAMs reported annually per company |
Lennox et al. (2019Lennox, C. S., Schmidt, J. J., & Thompson, A. (2019). Is the expanded model of audit reporting informative to investors? Evidence from the UK [ Working Paper]. Social Science Research Network. https://ssrn.com/abstract=2619785 https://ssrn.com/abstract=2619785 ...
), Sierra-García et al. (2019Sierra-García, L., Gambetta, N., García-Benau, M. A., & Orta-Pérez, M. (2019). Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom. The British Accounting Review, 51(3), 227-240.) |
+ |
- |
+ |
Matters reported |
KAM |
Quantity of matters reported per year and company categorized into six items: |
ACCA (2018Association of Chartered Certified Accountants. (2018). Key audit matters: Unlocking the secrets of the audit. https://www.accaglobal.com/vn/en/professional-insights/global-profession/key-audit-matters.html https://www.accaglobal.com/vn/en/profess...
) |
+ |
- |
+ |
Sector-specific matters (SpMatt) |
Assets |
Impairments |
Liabilities |
Complex matters (CompMatt) |
Controls |
Control |
Company size |
SIZE |
Natural logarithm of total assets |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Sierra-García et al. (2019Sierra-García, L., Gambetta, N., García-Benau, M. A., & Orta-Pérez, M. (2019). Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom. The British Accounting Review, 51(3), 227-240.) |
+ |
- |
+ |
Return on assets |
ROA |
Earnings before income tax divided by total assets |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas.) |
+ |
- |
+ |
Growth opportunity |
MB |
Market value divided by book value (price to book) |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas.) |
+ |
- |
+ |
Earnings for the period |
Loss |
Dummy taking the value 1 when the company presented a loss in the period and 0 otherwise (profit) |
Chu et al. (2018Chu, L., Dai, J., & Zhang, P. (2018). Auditor tenure and quality of financial reporting. Journal of Accounting, Auditing & Finance, 33(4), 528-554.), Sierra-García et al. (2019Sierra-García, L., Gambetta, N., García-Benau, M. A., & Orta-Pérez, M. (2019). Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom. The British Accounting Review, 51(3), 227-240.) |
- |
+ |
- |
Earnings per share in the previous period |
EPSp |
Actual value of earnings per share for the company in the period prior to the analysis period |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas.) |
+ |
- |
+ |
Auditing firm |
BIG |
Dummy taking the value 1 if the company was audited by a Big Four firm and 0 otherwise |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Sierra-García et al. (2019Sierra-García, L., Gambetta, N., García-Benau, M. A., & Orta-Pérez, M. (2019). Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom. The British Accounting Review, 51(3), 227-240.) |
+ |
- |
+ |
Age of the forecast |
Age |
Natural logarithm of the quantity of days between the date of the earnings per share forecast and the date of the actual earnings per share announcement |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas.) |
NA |
+ |
- |
Analyst coverage |
QAnalyst
|
Quantity of analysts who monitored the company in the period |
Behn et al. (2008Behn, B., Choi, J., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(1), 327-349.), Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas.) |
+ |
- |
+ |
Forecast bias |
DoTip
|
1 for optimistic forecast and 0 for pessimistic forecast |
Martinez (2004Martinez, A. L. (2004). Analisando os analistas: estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto [Doctoral Thesis]. Fundação Getulio Vargas., 2007Martinez, A. L. (2007). Otimismo e viés de seleção dos analistas. BBR - Brazilian Business Review, 4(2), 104-118.) |
+ |
- |
+ |
Operating sector |
Sector |
Sector where the company operates, according to the B3 website. Dummy for each sector, taking the communication sector as a reference |
Sierra-García et al. (2019Sierra-García, L., Gambetta, N., García-Benau, M. A., & Orta-Pérez, M. (2019). Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom. The British Accounting Review, 51(3), 227-240.) |
+ |
+ |
+ |
Year the KAMs were reported |
Year |
Dummies for 2017 and 2018, based on the year 2016 |
Sierra-García et al. (2019Sierra-García, L., Gambetta, N., García-Benau, M. A., & Orta-Pérez, M. (2019). Understanding the determinants of the magnitude of entity-level risk and account-level risk key audit matters: The case of the United Kingdom. The British Accounting Review, 51(3), 227-240.) |
+ |
- |
+ |