Research On The Influences Of Disclosing KAMs

Recently,in the light of the traditional auditor’s report being not able to provide sufficient information for financial statements users and the credibility gap between the CPAs and the public(resulting from the frequent audit failures during the 2008 financial crisis),reforms on the auditor’s report has been going on across the world.One of the biggest changes made to the auditor’seport is the requirement of disclosing key audit matters(KAMs).Nevertheless,what impact it will make on the supply of the auditor’s report is yet to be figured out.Based on the sample of the A-share listed companies from 2016 to 20 1 7,this paper carries out a research on the impact of CAS1504:Disclosing Key Audit1MattersIn TheAuditor’sReport,and finds out that:(1)ceteris paribus,the disclosing of KAMs has an positive impact on audit quality,audit fees and audit delay;(2)Compared with private companies,KAMs’influence on audit fees and audit delay of state owned enterprises has been weakened,while no significant moderating effects has been found on audit quality.This paper proves the effectiveness of communicating KAMs in the auditor’s report and points out the problems,i.e.,the increase of audit fees which results in imposing more economic burden on the company and the prolong of audit delay which makes the information contained both in the auditor’s report and the annual report less timely.Those problems worth the attention of the policy makers.The contributions of this paper are:unlike previous literatures,this paper uses the A-share listed companies from 2016 to 2017 as sample;and this paper explores the economic influences,from the supply of the auditor’s report,of the effects of disclosing KAMs in the auditor’s report on audit quality,audit fees and audit delay.Besides that,this paper also reveals the moderating effects of the nature of property of the company.