Silence is golden Disclosure of critical audit matters and auditors' perception of due professional care

Revised auditing standards now require the disclosure of critical audit matters (CAMs) in audit reports. However, these standards do not explicitly specify whether conclusive evaluations should be provided for these matters, leaving it to the discretion of auditors. Our study utilises psychological theories and experimentally tests the impact of CAM disclosure formats (with or without conclusive evaluations) on auditors' perceived due professional care. We find that CAMs with conclusive evaluations lead auditors to perceive a lower level of due professional care compared to CAMs without conclusive evaluations. When considering auditors' experience, our results show that the absence of conclusive evaluations in CAMs leads both less experienced and more experienced auditors to perceive a relatively high level of due professional care. However, the presence of conclusive evaluations in CAMs leads more experienced auditors to perceive a lower level of due professional care compared to their less experienced counterparts.