Research On Judgment And Audit Response Of Key Audit Matters In Construction Industry

With the development of economy and the perfection of market,the requirement of investors for the quantity and quality of information is increasing day by day.In 2015,the International Auditing and Assurance Standards Board issued a series of guidelines for new audit reports including ISA 701,increasing audit reports' elements,and enriching the contents of audit reports,which announced the start of the reform of the audit report.In order to converge with the international auditing standards and increase the information of audit reports,in December 2016,the Chinese Association of Certified Public Accountants promulgated 12 revised standards.Among them,Standard 1504 requires certified public accountants to communicate on key audit matters in audit reports,which is the most important content of this reform.The regime is intended to increase the informational value of auditor's report and thus to optimize decisions made by report users.However,there are not many relevant academic studies and existing conclusions are inconsistent.Based on above situation,this paper manually collates listed companies' audit reports in 2017,focusing on the construction industry,mainly studying the judgment and audit response of key audit matters.By means of quantitative and comparative analysis,this paper analyses the similarities and differences between construction industry and general listed companies in key audit matters,drawing the judgment ‘s characteristic of construction industry,and analysing the rationality in combination with industry characteristics and criteria requirements;Then it deeply analyses the reasons for judgment and audit responses of key audit items in construction industry,and studies the possible problems.Formatting reasons,lack of reasonable importance judgment and high similarity of audit response are the main problems.Finally,problem causes and improvement advice are carried out.It is hoped that this paper can be helpful on how to further standardize the audit information disclosure of listed companies,strengthen the trust of auditors and confidence of the audit report‘s fairness to users,reduce the degree of information asymmetry in capital market,and improve the capital allocation function of securities market in China.