Informational content of key audit matters and financial analysts’ forecasts

Abstract The aim of this article was to analyze the relationship between informational content key audit matters (KAMs) reported in Independent Audit Report (IAR) and financial analysts’ forecasts for companies listed on B3 S.A. - Brasil, Bolsa, Balcão (B3). research that has investigated relevance KAMs not analyzed incremental information about audited firm, from independent auditor’s viewpoint, can affect forecasts. findings reveal present relevant firm analysts, thus improving quality their In addition, it observed quantile analysis contribute fine tuning debate auditor-analyst is also widened, specifically regarding utility terms them considering using projections companies, reinforcing search improvement by regulator. conducted based generalized least squares (GLS) regressions covering 137 non-financial data (quarterly annual) available Thomson Reuters Eikon® Economatica®. general, quantity items as were revealed be significant relation earnings per share forecasting error, revealing a reduction asymmetry. Thus, higher value KAMs, better is, contributing forming an forecast consensus minimizing error estimates. disclosure no immediate reflection quarter following disclosure, with being diluted over period, impacting annual forecast.