Study On The Impact Of Communicating Key Audit Matters On Audit Quality

With the continuous improvement of China's capital market,investors have higher and higher requirements on the audit quality of listed companies' financial reports.On December 23,2016,the Ministry of Finance issued the Chinese certified public accountants auditing standards No.1504-communicating key audit matters in the audit report and other 12 criteria(new audit standards).The listed company is required to disclose the key audit matters and the audit procedures that have significant influence in the audit process in the audit report.From January 1,2017,it will be implemented in A+H-share listed companies,and other a-share listed companies will be fully implemented on January 1,2018.The communication of the key audit matters in the new audit report will have an important impact on the audit quality.Based on the review of related theoretical literature of key audit matters,audit quality and its influencing factors,this paper analyzes the role of key audit matters in affecting audit quality based on the two dimensions of the auditor's ability to find problems and the auditor's ability to report problems,and established the research hypothesis that key audit matters affect audit quality from the aspects of key audit matter disclosure,the number of audit procedures and their information content,and the value of key audit matter type.Use the experience data of A+H-share implementing the new auditing standards in 2016 and A-share main board companies in 2017 and 2018 to study the policy effects of communicating key audit matters in the audit reports of listed companies in China.In this paper,establish a regression equation model,and use descriptive statistics,multiple regression analysis and other methods to empirically test the research hypothesis.The empirical results show that the disclosure of key audit items in the audit report is conducive to improve audit quality;the greater the number of audit procedures disclosed,the higher the audit quality;the greater the amount of information of audit procedures disclosed,the higher the audit quality;the higher the value of the key audit matter type,the higher the audit quality.The above research results provide effective evidence for measuring the effectiveness of the implementation of the new audit reporting standards.Finally,based on the research conclusions and the implementation status of China's new audit report standards,this article puts forward corresponding suggestions for improving the policy effect of implementing the new standards from the aspects of systems and regulations,the needs of audit report users,and the overall professional level of auditors.