Research On Disclosure Of Key Audit Matters

n recent years,the number of violations of listed companies in China’s pharmaceutical manufacturing industry has been increasing year by year,and fraud incidents have been occurring.For example,in 2019,Furen Pharmaceutical was investigated for false misstatements,illegal appropriation of funds and illegal guarantees.The reason behind this is not only related to the weak internal control of the company,but also related to the lack of disclosure of key audit matters of listed companies.Although the Auditing Standards of Chinese Certified Public Accountants No.1504--Communicating Key Audit Matters in Audit Reports was promulgated in December 2016,and it was expressly stipulated that from January 1,2017,A+H shares could independently choose whether to disclose key audit matters in accordance with the new standards.From January 1,2018,all listed companies in the industry will be required to disclose key audit matters in accordance with the new standards.However,there are still many problems in the information disclosed by listed pharmaceutical manufacturing companies,so it is of certain practical significance to study how to disclose key audit matters better.First of all,this paper uses the literature research method to sort out and review the relevant domestic and foreign literatures on the analysis of key audit matters,and lays a solid foundation for subsequent research according to the guidance of risk-oriented audit,information asymmetry and other theories.Then,the new and old auditing standards are compared and analyzed to explore the necessity of disclosing key auditing matters.After that,the case analysis method was used to analyze and discuss the violation process of Furen Pharmaceutical.By comparing the key audit matters disclosed by Furen Pharmaceutical in 2017 and 2018,it was found that there were problems such as non-standard disclosure of key audit matters,insufficient information content and ineffective use of professional judgment by certified public accountants in the disclosure process.Finally,combined with the above problems,the author puts forward corresponding improvement suggestions on the disclosure of key audit matters,and believes that the disclosure of key audit matters should be improved from the aspects of perfecting the company’s internal control system,enhancing the professional judgment ability of certified public accountants,disclosing "personalized" key audit matters and strengthening the attention of regulatory authorities.According to the above research,when determining key audit matters,certified public accountants should not only consider the characteristics of the industry,but also take into account the risk that has a great impact on the enterprise,the risk that is easy to be omitted,and the important judgment related to the management.In addition,the audites,certified public accountants,accounting firms and regulatory authorities should make joint efforts to create a good environment for the disclosure of key audit matters,so as to enhance the value of audit reports and provide the success rate of investors’ investment decisions.Through this study,it is hoped to provide reference opinions on improving the deficiency of disclosure of key audit matters in the pharmaceutical industry,establishing "personalized" identification standards for key audit matters,and provide solutions for other firms that may encounter obstacles in the process of disclosing key audit matters.