Research On The Key Audit Disclosure To Audit Fees

In 2015,IAASB issued and required the implementation of a series of latest auditing reporting standards.In order to comply with the development of international auditing standards,the ministry of finance officially issued a series of new auditing standards including no.1504 auditing standards on December 31,2016.The audit report is required to include a section of key audit items to disclose the key audit items,the identified reasons and the audit response procedures.The purpose is to increase the information content and relevance of audit reports and improve audit quality in order to meet the investment needs of investors.On the one hand,audit fees reflect the audit hours that certified public accountants expect to invest in the audit process.On the other hand,it reflects the risk compensation required by the certified public accountant due to the potential civil liability.The level of audit fees determines the investment in the audit process and hence the audit quality.Reasonable collection of audit fees is conducive to ensuring the independence of audit institutions and promoting the development of both sides.According to the new audit reporting standards,since the disclosure of key auditor matters requires auditors to focus on the operational risks in the financial statements that involve significant management judgments and influence the financial statements,and auditors need to allocate audit resources rationally and implement more appropriate audit procedures,certified public accountants will increase audit hours for this purpose.At the same time,the disclosure of key audit items means that certified public accountants face the risk of being sued,and the key audit items disclosed by certified public accountants may become the basis for lawsuits,increasing the audit risk premium.This paper empirically tests the impact of disclosure of key audit items on audit fees from the exogenous event of disclosure of key audit items,and verifies the impact path,whether the increase of audit hours or the increase of audit risk premium affects audit fees.Based on the empirical analysis of all a-share listed companies in Shanghai and shenzhen from 2015 to 2017,this paper finds that:(1)the disclosure of key audit items is positively correlated with audit fees.(2)in order to disclose key audit matters,the CPA increases the audit fee by increasing the audit working hours,but the risk premium generated by the disclosure does not have a significant impact on the audit fee.(3)further study found that the relationship between audit firm types of key audit issues and audit fees.Compared with the "big four" accounting firms,the influence of the "non-big four"accounting firms on the audit fees is more obvious.The possible innovation of this paper lies in the data source:manually collect the key audit items disclosed in the annual financial reports of listed companies and make classified statistics.From the perspective of research:this paper USES a new perspective of the exogenous impact event that the new audit standards require disclosure of key audit items to explore the impact path of disclosure of key audit items on audit fees,that is,whether audit fees affect audit fees by increasing audit hours or risk premium.The conclusion of this paper is expected to provide empirical evidence for exploring the impact path of audit fees.