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Purpose: The purpose of this study is to explore audit procedure disclosures related to key audit risks, during the prior year and the initial year of the COVID-19 outbreak, by reporting on matters published in over 3,000 Australian statutory audit reports during 2019 and 2020. Design/methodology/approach: This study partially uses latent semantic analysis methods to apply textual and readability analyses to external audit reports in Australia. The authors measure the tone of the audit reports using the Loughran and McDonald (2011) approach. Findings: The authors find that 3% of audit procedures undertaken during 2020 were designed to address audit risks associated with the COVID-19 pandemic. As a percentage of total audit procedures undertaken during 2020, the authors find that smaller practitioners reported much less audit procedures related to COVID-19 audit risks than most larger audit firms. Finally, the textual analysis further found differences in the sentiment or tone of words used by different auditors in 2020, but differences in sentiment or tone were not found when 2020 was compared to the prior year 2019. Originality/value: This study provides early evidence on whether auditors designed audit procedures to deal specifically with audit risks that arose due to the COVID-19 pandemic and on the extent and nature of those audit procedures. The study will help policymakers to better understand whether Key Audit Matters provided informational value to investors during a time of global crisis. [ABSTRACT FROM AUTHOR]

The aim of this study is to explore the new Australian auditing regulations around Key Audit Matters (KAMs), fully adopted since 2017, by reporting on matters published in over 3,000 Australian statutory audit reports from 2017 to and including 2018 reports. The study provides the first evidence on whether auditors used the same or different disclosures related to audit procedures when reporting on the same KAM in the second year in Australia. The findings suggest the most common KAM disclosures are related to "impairments of goodwill and intangible assets," "revenue recognition," "asset valuation," "acquisitions," and "exploration and evaluation." Around 70% of Australian auditees had the same KAMs disclosed in both years 2017 and 2018. The study found differences between large and small audit practitioners related to the average number of KAMs disclosed and the average number of audit procedures undertaken per KAM. There were also differences found between industries and auditee size. [ABSTRACT FROM AUTHOR]