Research On The Impact Of Key Audit Matters Disclosure On Investors And Auditors

Due to the financial fraud incident and the outbreak of the 2008 economic crisis,the insufficient information content problem in the standard audit reports model has attracted more and more attention from users.In order to judge the company's operating status more effectively,users hope to change the current audit reports mode.In order to meet the requirements of information users,the International Auditing and Assurance Standards Board issued revised auditing standards in 2015,requiring communication of key audit matters in independent audit reports.In order to achieve convergence with international standards,Chinese Fiscal Ministry issued the "China Auditing Standards for Auditing Accountants No.1504-Communicating Key Audit Matters in Audit Reports" in 2016,requiring the addition of key audit matters in the audit reports.The academic community began to study the impact of the disclosure of key audit matters,but the existing researches mostly use the experimental methods to test foreign data,and the conclusions obtained are not consistent.Then,how will the different entities in China respond to the disclosure of key audit matters?Can key audit matters increase the information content of audit reports,improve audit quality,and achieve the purpose of audit standards implementation?In this context,this paper uses the combination of event research and multiple regression analysis to empirically test the impact of China's key audit matters disclosure on investors and auditors.In the specific research structure,this paper first reviews the provisions of domestic and foreign auditing standards,definies the eoncept of the key audit matters and draws inspirations for the development of auditing standards.On this basis,this paper analysis conditions of key audit matters disclosure to preliminarily discuss the problems existing in the implementation of Chinese auditing standards.In order to better explain the results of data analysis,this paper proposes research hypotheses based on audit motivation theory,investor behavior theory and insurance theory,and establishes the research model of this paper with reference to the relevant literatures,and conducts sample screening.On the basis of this,we test the impact of the disclosure of key audit matters on investors and auditors in China.The results of the empirical research indicate that on the day of disclosing key audit matters,the market makes a negative response.In the subsequent period,the market presents a significant improving positive response.The auditors will increase audit fees and audit quality with disclosure of the key audit matters.Through analysis,this paper believes that because key audit matters reveal the risks that enterprises may face to a certain extent,the market has reacted negatively on the day of the event;in the long run,the disclosure of key audit matters can reduce the information barrer between the investors and the company and also reduce the sensitivity of investors to risk,increase the investors trusiness of audit reports,then the investors reduce the risk premium requirement,so the market responded positively to it in the following period.At the same time,the diselosure of key audit matters will make the auditors face higher litigation risks,thereby paying more time to obtain adequate audit evidence and improve the quality of audit report information.Due to the rise in risk premiums and audit costs,auditors are charged a higher audit fee.The research conclusions of this paper,while providing policy basis for the implementation of China's auditing standards,find problems in the implementation of auditing standards and then propose relevant suggestions to promote the better implementation of relevant auditing standards.