Empirical Study On The Relationship Between Disclosure Of Key Audit Matters And Corporate Capital Cost

The new audit reporting standards have been implemented globally in recent years with the aim of increasing the transparency of audit work and providing more information.Key audit matters are the product of the reform of audit reporting standards,and are the most important matters that certified public accountants consider to audit the current financial statements according to professional judgment,and should be selected from the matters communicated with the governance layer.Whether the reform of audit reporting standards can increase the information value of audit reports can be empirically tested through the economic consequences of the disclosure of key audit matters.In addition to the existence or absence,key audit matters,because of their personalized disclosure,have many characteristics that can be recognized by investors,and their characteristics are also the focus of attention of enterprises and accounting firms.The capital cost of enterprises is related to the survival and development of enterprises,which has been widely concerned by the world of practice and academia.This paper takes the cost of capital as the economic consequence of the disclosure of key audit matters,studies the correlation between the disclosure of key audit matters and the cost of capital under the background of the reform of audit standards,and the correlation between the disclosure characteristics of key audit matters and the cost of capital.In this paper,A+H-share listed companies from 2014 to 2017 were taken as the research samples,and the disclosure features of equity capital cost,debt capital cost and key audit matters were calculated and sorted out manually,and the required control variables were determined on the basis of literature.The model is constructed to study the impact of key audit matters disclosure on capital cost,as well as the impact of the unique and quantitative characteristics of key audit matters disclosure on capital cost.The empirical results show that the disclosure of key audit matters can reduce the cost of equity and debt capital;The unique and quantitative characteristics of key audit matters are also negatively correlated with the cost of equity capital and the cost of debt capital.By studying the relationship between key audit matters and the cost of capital of enterprises under the background of the reform of audit reporting standards,this paper demonstrates that the disclosure of key audit matters increases the information value of audit reports,reduce the cost of capital and provides empirical evidence for whether the reform direction of audit standards meets the public demand;Based on the research on the disclosure characteristics of key audit matters,this paper points out how to increase the information value of key audit matters section,and provides a reference for the practice of certified public accountants and enterprises in determining the key audit matters disclosed.