The Information Content Of Audit Report,Audit Qulity And Audit Fees

Audit report is very important for investors to make decisions.The biggest flaw in the current audit report is that the information content is not enough,and there is a gap between the information needed by the investors and the information obtained.As a result,the International Auditing and Assurance Standards Board(IAASB)has reformed the audit report model with the interests of financial information users,and published the revised audit reporting guidelines in 2015.China also issued the new report of audit criterion on December 23,2016,and the same with IAASB audit,s report standard in order to achieve international convergence.Since January 1,2017,the new report of audit criterion will be firstly applied in A + H shares and H shares listed company;and will expand to all the company on January 1,in 2018.Based on this,this paper uses the method of theoretical analysis and empirical analysis to study the impact of the implementation of the new audit report on the audit quality and audit fees,so as to test whether the criterion achieves the expected effect.The theoretical research part firstly discussed the changes of the new report of audit criterion.For example,the new audit's report standard has increased the "key audit matters" and "other information",concerned about the continuous operation,adjusted the audit report structure,improved the audit report information content and audit transparency;And then analyzes the relevant factors of audit quality and audit fees;Finally,based on the study mentioned above,the impact of the new audit's report standard on audit quality and audit fees is analyzed.The new audit criterion requires disclosure of important auditing procedures and professional judgment conducted,which will be inspected by the public.Therefore,in order to cope with increased audit risk,auditors will be more diligent and improve the quality of the audit and audit fees.Based on the research above,this paper proposes two assumptions,that are the new report of audit criterion will improve the audit quality and audit fees.In data experiment,given on the revised Jones model and Simunic model,we examines the audit quality and audit fees of the A + H shares and the pure A-share listed companies in 2016.We found that the implementation of the new standards on auditing partly improves the quality audit quality and audit fees.In the case analysis part,this paper verifies the positive conclusions by using a case of audit failure.If the firm implements the new report of audit criterion,the audit procedures need more standardization in order to reduce the audit risk.Therefore,the quality of auditing will be improved and the audit fees will also increase.