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Critical Audit Matters and Nonprofessional Investors’ Perceptions of Auditor Credibility, Information Overload, Audit Quality and Investment Risk

Brian Todd Carver et al.

Current Issues in Auditing2025https://doi.org/10.2308/ciia-2024-033article
AJG 2ABDC B
Weight
0.50

What the paper says

SUMMARY The addition of critical audit matters (CAMs) to the audit report is a significant change intended to provide investors greater information that is useful for decision making, however, there were also concerns about unintended consequences. This article summarizes Carver, Muriel, Trinkle (2023), who find that the disclosure of a CAM enhances perceived auditor credibility and in turn, perceived audit quality, which then leads to a decrease in perceived investment risk. However, a CAM also increases feelings of information overload, partially offsetting the positive effect on auditor credibility. Auditors should balance the volume and complexity of information in CAMs to lessen the potential negative effects of information overload. However, auditors can also view CAMs as an opportunity to enhance transparency and credibility. These findings are timely for auditors, audit committees, financial statement preparers, and regulators, who must consider the impact CAMs can have on the information environment. Data Availability: Data are available from the authors upon request.

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https://doi.org/https://doi.org/10.2308/ciia-2024-033

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@article{brian2025,
  title        = {{Critical Audit Matters and Nonprofessional Investors’ Perceptions of Auditor Credibility, Information Overload, Audit Quality and Investment Risk}},
  author       = {Brian Todd Carver et al.},
  journal      = {Current Issues in Auditing},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/ciia-2024-033},
}

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Critical Audit Matters and Nonprofessional Investors’ Perceptions of Auditor Credibility, Information Overload, Audit Quality and Investment Risk

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.