Note(s): This table reports the results of the two-stage least squares (2SLS) estimation examining the effect of auditor–client geographic proximity on key audit matters (KAMs). The instrumental variables IND_AVG_PROX_KM and IND_AVG_PROX_KM IND_AVG_PROX_MN IND_AVG_PROX_MN represent the industry-year average geographic proximity measures and are used to instrument lnProx_KM and lnProx_MN in the first stage regression. Variable definitions are provided in Table 2. Robust standard errors are reported in parentheses. ***p < 0.01, **p < 0.05, *p < 0.10