The Impact of Key Audit Matters Disclosure on Share Price: A Moderating Role of Industry Competitiveness in Malaysia

Authors

  • Nor ‘Asyiqin Abu Faculty of Accountancy Universiti Tekhnologi MARA 78000 Melaka, MALAYSIA.
  • Noor Idayu Ismail Faculty of Business and Management Open University Malaysia Blok C, Kompleks Kelana Centre Point, Jalan SS7/19, Kelana Jaya, 47301 Petaling Jaya, Selangor, MALAYSIA.
  • Mohd Mohid Rahmat Faculty of Economics and Management Universiti Kebangsaan Malaysia 43600 UKM Bangi, Selangor, MALAYSIA.
  • Effiezal Aswadi Abdul Wahab School of Accounting, Economics and Finance Faculty of Business and Law Curtin University Bentley 6102, Western Australia, AUSTRALIA.

Keywords:

Bursa Malaysia, industry competitiveness, investment decision, key audit matters, share price

Abstract

This study investigates the relationship between key audit matters (KAM) disclosure and share price, as well as the influence of industry competitiveness on this relationship. Using a panel dataset of 931 observations of firm-years from Bursa Malaysia spanning 2016 to 2019, it was revealed that investors consider not only the quantity but also issues disclosed by auditors in KAM disclosure. Furthermore, KAM disclosure was seen to positively impact share prices in oligopoly industries but negatively affect companies in competitive markets. This study makes a novel contribution by investigating how industry competitiveness moderates the relationship between KAM disclosure and share price. The findings highlight the significance placed by investors on KAM disclosure in competitive markets, offering implications for investment decision-making. Nonetheless, this study acknowledges inherent limitations in its scope, particularly its limitation to Malaysia, which suggests caution in generalising findings to other countries.

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Issue

Vol. 23 (2025): ASIAN JOURNAL OF ACCOUNTING AND GOVERNANCE

Section

Articles

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