Gender and Occupational Socialization in the Auditing Profession. Does Audit Partner Gender Influence Key Audit Matter Topics?

According to the occupational socialization theory, gender differences disappear among employees within the same work environment. Prior research has investigated gender differences in financial reporting, risk management and auditing decision, providing mixed evidence. This paper examines the association between audit partner gender and the volume and topic of key audit matters (KAMs) disclosed in expanded audit reports. We employ a dataset of all listed firms in Spain during 2017, the first year of implementation of expanded auditing regulation in countries that follow ISAs. KAMs provide those matters that, in the auditor’s professional judgment, are of most significance during the audit process. Our regression results show no significant gender differences in KAMs volume, which can be explained within the occupational socialization. The audit report process is written bottom-to-top from the audit team to the audit partner to sign the final report and therefore significant differences based on gender seem to be diluted in the team work. Likewise, females and males behave similarly when reporting KAM topics, but a relationship between audit partner gender and intangible and revenue recognition KAMs is found. We also apply multiple correspondence analysis and ask experienced female audit partners in practice to dig into the causes for our regression results, finding noteworthy remarks. Our study reveals the effect of auditor gender on KAM disclosures, which may be of interest to financial analysts using the audit report, auditors, and regulators concerned with the mandatory disclosure of audit information