Research On Influence Of Key Audit Matters On The Information Content Of Audit Reports

After the continuous improvement of the form of audit report in the past,it has formed a mature standardized form.More and more scholars have questioned the content and form of traditional audit reports and their value to investors.In view of the shortcomings of the traditional audit reporting mode,the international audit and authentication standards committee has revised the audit standards.Adding key audit items in the audit reports is part of the reform of the audit reporting standards,so as to improve the information content and transparency of the audit reports.In line with the reform of international auditing standards,China drafted the auditing standards for Chinese certified public accountants no.1504--communication of key audit matters in audit reports in 2016,which was implemented in the auditing business of A+H share companies from January 1st,2017.Key audit items can improve the users' views on audit reports and enhance the effectiveness of audit for investors' decision-making.Key audit items through the detailed description of the audit work,the traditional audit report mode is a breakthrough improvement.The article selected 2016-2017 A-share companies related data as the research sample,the new auditing standards require disclosure of key audit matters,whether to enhance the decision usefulness,increases the information content of audit report.The empirical test for key audit matters in the disclosure of the content itself for investors should be no positive and negative reaction,the selection of focus on the item description is auditor and audit measures,its role is to increase more in the audit report to investors decision-making useful information,Therefore,this paper takes the change of the cumulative excess return rate as the measurement index of the information content of the audit report,and finds that there is a positive correlation between the disclosure of key audit items and the change of the cumulative excess return,indicating that the disclosure of key audit items increases the information content of the audit report,and the effect of the criterion is tested.Further,consider the different impacts of the disclosure of key audit items on the audit reports issued by different types of accounting firms,the audit reports of different types of audit opinions,and the audit reports of companies with different levels of profitability.It is concluded that the disclosure of key audit items has a significant enhancement effect on the information content of the audit reports issued by non-big four accounting firms,the information content of the audit reports issued by standard audit opinions,and the information content of the audit reports of companies with different levels of profitability.However,it has a more significant enhancement effect on the information content of the audit reports of non-profit companies.The research significance of this paper is to test the practice implementation effect of the standard reform of "auditing standards of Chinese certified public accountants no.1504--communicating key audit matters in audit reports",and draw a conclusion that the disclosure of key audit items improves the information content of audit report.The promulgations of new standards have achieved initial results.