Extended auditor reports and key audit matters disclosure as complements to corporate narrative reporting

The aim of this chapter is to explore how the extended auditor report ("EAR") and key audit matters ("KAMs") disclosures can complement the corporate narrative reports prepared by the management. Two other aims of the chapter are to explore the evidence from the KAM and EAR implementation so far, and whether they have fulfilled the expectations of regulators and other stakeholders. In doing so, we review the relevant academic literature, accounting standards and reports published by the professional accounting bodies, accounting firms, accounting and auditing standards setters as well as regulators that provide insights into EAR and KAM disclosure implementation in different jurisdictions, as well as their accompanying benefits and challenges.