Effects of adopting IFRS 9 on the audit of financial instruments in non-financial companies

Purpose: This study aimed to identify the effects of adopting IFRS 9 on the audit of financial instruments in Brazilian non-financial companies. Methodology: The empirical tests were based on data from 338 non-financial companies listed on B3 for the period from 2014 to 2021, obtained directly from the financial statements and audit reports, on the CVM website. The statistical tests comprised two stages: descriptive analysis, by comparing the proportion of mention of financial instruments, including the justification for changing opinions, in the pre- and post-IFRS 9 periods; and testing research hypotheses through Logit regression estimations. Results: The results of the empirical tests revealed that the adoption of IFRS 9 is positively related to the mention of financial instruments in audit reports, although it did not increase the propensity to modify opinions based on such items. Contributions of the Study: Empirical evidence contributes to the literature on financial instruments auditing, allowing us to identify how the introduction of the new accounting standard impacted the audit process and enabling regulators and information users to understand the possible effects of the standard on the audit of financial instruments. Additionally, the findings reveal the factors that determine how the adoption of IFRS 9 affected the auditor's work and report. It fills a gap in the literature regarding the direct impact of IFRS 9 on the audit of non-financial entities, as previous studies have mostly focused on other aspects of financial instruments auditing and often concentrated on financial institutions.