Research On Disclosure Of Key Audit Matters In The Construction Industry

The audit report is a written report formed by the certified public accountants’ opinions on the financial statements of the audited entity,and it is also the main means for the certified public accountants to communicate the audit matters with the users of the financial statements.In the past,the audit report is a standard audit report mode,with unified format and elements,and has the advantages of concise content and clear audit opinions,but it also has the disadvantages of low information content and poor decision-making relevance.In 2015,The International Auditing and Assurance Standards Board(IAASB)issued new International Auditing Reporting Standards,which significantly improved the audit reporting model and enriched the content of audit report.One of the biggest changes is the addition of the key audit matters section in audit report to meet the information needs of financial statement users.In2016,The Chinese Institute of Certified Public Accountants(CICPA),in accordance with the requirements of international convergence of auditing standards and in light of China’s actual conditions,formulated 12 auditing standards for China certified public accountants,including No.1504-communicating key audit matters in auditing reports,which were approved and published by the Ministry of Finance.The new standards will be implemented for A+H share listed companies and H share listed companies audited under China auditing standards from January 1,2017,and will be fully implemented from January 1,2018.The implementation effect of key audit matters standard and whether to achieve the original intention of the reform have attracted much attention from all sides.Based on this background,this paper studies the disclosure of key audit matters in the construction industry,analyzes the problems existing in the implementation of the standard,and puts forward corresponding suggestions.This paper reviews the domestic and foreign literature related to the disclosure of key audit matters and determines the research focus of this paper.According to auditing standard No.1504 and its application guideline,this paper summarizes the relevant concepts of key audit matters,and uses Principal-agent Theory,Modern Risk-oriented Audit Theory,and Information Asymmetry Theory as the theoretical basis of this paper.This paper elaborates the industry and financial characteristics of the construction industry,analyzes in detail the number,format,type and content of disclosure of key audit matters in the construction industry from 2017 to 2019,and introduces a case company to summarize the disclosure characteristics of key audit matters in the construction industry.This paper finds that the disclosure of key audit matters is simply repeated in different years,and the specific situation of the audited entity is not connected.There are also problems such as obvious tendency of templatetization and lack of comprehensibility.In view of these problems,this paper analyzes the causes of the problems from three aspects: the audit institution,the audited entity and the regulatory institution,and gives the improvement suggestions.It is hoped that the research of this paper can help to improve the quality of disclosure of key audit matters and make a contribution to the original intention of the audit report reform.