Research On The Decision-making Usefulness Of Key Audit Matters Of Listed Companies

In the capital market,listed companies issue financial statements to provide investors with relevant information.Auditors issue audit reports that meet the auditing standards on whether there is no risk of material misstatement in the financial statements,so as to ensure the authenticity of the information obtained by investors.In recent years,the quality of audit reports has been questioned.The lack of information content in traditional reports leads investors and other report users to promote the reform of audit reports.In order to solve this problem and keep convergence with international standards,China's Ministry of Finance approved Audit Standard No.1504 at the end of 2016,stipulating that listed companies of Shanghai and Shenzhen exchanges should communicate key audit matters in the audit report,which will be fully implemented from January 1,2018.The new standards require auditors to increase the information content of audit reports by adding key audit items,explaining the reasons why an item is identified and how to implement audit work for the item.In order to test whether the new audit reporting standards can provide more useful information for the decision-making process of investors,this paper puts forward the following questions: first,whether the key audit matters have information content,which can affect the decision-making of investors.Secondly,whether there are differences in the impact of different types of key audit matters on investors' decisionmaking behavior.Third,in the description of audit response in the key audit matters section,compared with the description of the positive conclusion evaluation of a certain matter,whether the positive conclusion evaluation can affect the decision-making usefulness of the key audit matters.Fourth,whether the information content of key audit matters varies with the size of the firm.In order to study the above issues,this paper combs the existing research results on key audit matters.Based on agency theory,information processing theory,effective market theory and decision usefulness theory,the company listed on the main board of Shanghai and Shenzhen in 2018 is selected as the research sample,and the relationship between key audit matters and decision usefulness of investors is studied by event research method and multiple regression analysis method Department.The empirical results show that:(1)key audit matters have information content,which can affect the decision-making behavior of investors.The results of multiple regression analysis show that the disclosure of key audit matters has a negative correlation with the response of capital market,that is to say,compared with the undisclosed key audit matters,the disclosure of key audit matters will act as a dangerous signal to inhibit investors' decision-making.(2)Different types of key audit matters have different influence on investors.The higher risk key audit matters have higher information content and stronger influence on investors' behavior.(3)Compared with no positive conclusion evaluation in audit response,positive conclusion evaluation will affect the investors' response to key audit matters.And the statement of the conclusion evaluation has a positive correlation with the response of the capital market,that is to say,the conclusion evaluation of the positive area pole can reduce the risk perception of the investors on the key audit matters.(4)Compared with other accounting firms,the audit reports issued by the “BIG4” have higher information content and greater influence on investors' decision-making.