Research On The Impact Of Disclosure Of Key Audit Matters On The Cost Of Financing Costs Of Enterprises

The audit report is the main way to achieve communication between investors and certified public accountants,and it will have a direct impact on investors' investment decisions.After the outbreak of the global financial crisis in 2008,traditional audit reports in a single format became increasingly difficult to meet the information needs of investors.To this end,the UK Financial Reporting Council(FRC),the International Auditing and Assurance Standards Board(IAASB),the US Public Company Accounting Oversight Board(PCAOB),and China's Auditing Standards Board and other regulatory agencies have successively issued policies on audit report reform,The key lies in adding key audit items to the audit report,increasing the information content of the audit report,and increasing its usefulness in decision-making.The level of corporate financing costs directly affects the company's operating performance and sustainable development.So how does the disclosure of key audit matters affect the financing cost of an enterprise,is it to reduce the financing cost of an enterprise by mitigating information asymmetry or to increase the financing cost of an enterprise by exerting the risk signal transmission effect?Based on this,this paper uses the A-share listed companies in China from 2015 to 2017 as the research sample,adopts the propensity score matching method and the double difference method,and studies the impact of key audit event disclosure on corporate financing costs from the two paths of information asymmetry and risk signal transmission,focusing on the following three Questions:(1)How the disclosure of key audit matters affect the financing cost of the enterprise;(2)Whether the impact of key audit matters disclosure on the financing cost of the enterprise is different under different property rights and the accounting firm sizes;(3)The impact of the number of key audit matters on the financing cost of the company and whether there are heterogeneities in the path of the impact of different key audit items on the financing cost of the company.The study found that:(1)The disclosure of key audit matters reduces the financing cost of enterprises by mitigating information asymmetry;(2)Compared with non-state-owned enterprises,key audit matters The effect of disclosure on the reduction of corporate financing costs is more significant among state-owned enterprises.Compared with the non-international four major companies,the disclosure of key audit matters on the financing cost is more prominent among the international four major companies;(3)The more key audit matters disclosed,the stronger the warning effect of the risk signal,and the higher the financing cost of the enterprise;different key audit matters have different influence paths on the enterprise's financing cost.In order to ensure the reliability of the research conclusions,after verifying the hypothesis is established,the article further uses the method of replacing matching methods and replacing variables to conduct a robust test on the research results,making the conclusions more reliable.The possible innovations and contributions of this article are:From the research perspective,the two mechanisms of information asymmetry and risk signal transmission are used to reveal the impact mechanism of key audit matters disclosure on corporate financing costs,and it expands the research perspective of the economic consequences of key audit matters disclosure and information disclosure and financing costs.In terms of research ideas,starting from the reform of the audit report,study the impact of the disclosure of key audit matters on corporate financing costs,enrich the literature on the economic consequences of key audit matters,and at the same time provide a theoretical basis for companies to solve the problem of financing difficulties and the government establishes sound audit report standards.