الفهرس 
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Abstract
External audit plays a vital role in restraining the opportunistic managerial behaviour. This research aims to investigate this role in the case of the discretionary decision related to goodwill impairment. Prior studies on goodwill impairment highlight the opportunistic behaviour exercised by managers while testing goodwill for impairment. Rather than using the discretion allowed under the impairment approach to signal private information about the actual economic circumstances of recorded goodwill, managers may act opportunistically to benefit from the flexibility in accounting standards to accelerate/delay/avoid the recognition of goodwill impairment loss. The change in the audit reporting regime in the UK in 2013 mandated auditors to provide an extended audit report (EAR). This is to disclose client-specific information related to the risks of material misstatement (RMMs) that had the most significant effect on the overall audit strategy; the allocation of audit resources; and the engagement team effort. Goodwill impairment is one of the highest three RMMs disclosed by auditors in the UK. Motivated by this regulatory change in the UK audit market, this thesis aims to study the implications of the EAR through investigating its potential impact on the recognition and value relevance of goodwill impairment. Using a sample of UK FTSE ALL SHARES non-financial companies over the period from 2010 to 2016, the thesis provides various contributions to the current research. First, results show an improvement in the recognition of goodwill impairment loss following the EAR’s adoption. In particular, the association between firms’ low-performance indicators and recognised goodwill impairment is much stronger post the EAR adoption. Moreover, this relationship is more pronounced when auditors consider goodwill impairment as a risk item. Second, extended auditor’s disclosures are found to provide information that is relevant to investors, since the negative association between reported goodwill impairment loss and company’s market value is moderated by the EAR adoption and the extent of auditor’s disclosures. These findings highlight the potential role that EAR could play in controlling discretionary management behaviour and reducing information asymmetry, supporting the auditor’s role in promoting confidence, reinforcing trust in the financial information, and hence mitigating the agency problem.