Exploring the Impact of Auditor Communication on Investor Perception and Decision-Making in Public Companies

Posted: Apr 04, 2019

• Nora Pearson
• Ella Bryant
• Hazel Stevenson

Abstract

The communication of audit findings represents a critical junction in the financial information ecosystem, serving as the primary mechanism through which independent verification of corporate financial statements reaches capital market participants. Traditional auditing research has predominantly focused on the substantive content of audit opinions—particularly the binary distinction between clean and modified opinions—while largely overlooking the nuanced communicative elements that may significantly influence how investors process and respond to this information. This study addresses this gap by examining how specific linguistic and structural features of auditor communications shape investor perceptions and subsequent decision-making processes in ways that extend beyond the formal audit opinion itself.