Market Reaction Research On The Disclosure Of Key Audit Matters By Listed Companies

With the continuous occurrence of financial fraud cases and the outbreak of financial crisis,the information content in traditional audit reports is limited,which is difficult to meet the information needs of investors,making investors suffer huge losses.In order to further improve the communication value of audit reports and provide more useful information on decision-making,the Ministry of Finance has issued 12 regulations,including the communication of key audit matters.Since its implementation in 2016,the new standard has attracted the attention of the domestic academic circles.However,due to the short implementation time,the number of samples in the existing studies is too small,and the lack of dynamic analysis,especially the market response research is still rare.It is also important to study what key audit matters respond to in the investment market,and how they can bring incremental information to investors’ decisions.This paper uses literature research,case analysis and empirical research methods to analyze the market response of key audit matters theoretically,and further tests the market response of key audit matters disclosed of listed companies through typical cases and empirical methods.Specifically,review relevant documents at home and abroad,analyze the market response mechanism of key audit matters,and analyze the disclosure since the implementation of new audit standards in 2016,further select Yunnan Baiyao as a specific case,case analysis from the current situation and market response;follow the previous research,take the data of A-share listed companies from 2017-2020 for event study and group inspection according to the firm size and type of audit opinions.The results show that since the new implementation,there are problems of small disclosure,type concentration and standardized description;the disclosure of key audit matters can cause market response;the more the disclosure,the more positive the market reaction;asset impairment matters can produce positive market reaction,while revenue recognition matters cannot produce market reaction;in the group study,the research conclusions of non-four firms and the standard unqualified audit opinion samples are consistent with the conclusions of the whole sample,and the regression results of other group samples are not significant.Based on the above conclusions,this paper makes three policy suggestions.First,the audit standards makers should further improve the standards and clearly stipulate the standards for the disclosure of key audit matters;second,the CPA should enrich the disclosure content and avoid homogenization;third,investors need to improve their expertise.