Analysis On The Quality Of Disclosure Of Key Audit Matter In Public Company

In order to improve the information content of the audit report and meet the demand for high-quality information in the capital market,the Ministry of Finance issued a new auditing standard in December 2016.The most important one is to communicate key audit matters in the audit report.The increase of key audit matters will help to improve the information content of audit reports,help investors better locate the major risk areas of audited units,and improve the transparency of audit work.In view of the above policy changes,this paper takes the key audit matters of A-share main board public companies and A+H stock companies as the research object,and analyzes the quality of the disclosure of key audit matters of public companies in China.Based on the quality characteristics of accounting information and the disclosure requirements of the new auditing standards for key audit matters,this paper constructs a quality assessment system for key audit matters—relevance,adequacy and comprehensibility,and based on the quality assessment system for key audit matters in China.Conduct analytical evaluation.The results show that the correlation of key audit matters is very low.Although the key audit matters disclosed are closely related to the characteristics of the industry,they are not described in terms of the company’s own situation.The same company has similar descriptions when disclosing the same items in different years,and does not reflect the annual difference.The sufficiency of key audit matters is insufficient,which is reflected in the fact that the number of items disclosed in China is relatively small,far lower than other countries;most enterprises disclose relevant elements according to the requirements of the guidelines,but the description of the reasons for auditing key audit items and the audit response measures are insufficient.The comprehensibility of key audit matters is low.The public companies in China mainly disclose the key audit matters in purely written form,which is not intuitive;the description of the reasons and the description of the auditing countermeasures are mixed,and the information users cannot distinguish the specific ones.Projects that reduce comprehensibility.Through statistics,it is found that the quality of disclosure of key audit matters is restricted by three aspects of the nature of accounting firms,certified public accountants and enterprises.Compared with the disclosure of public companies in the UK,this paper believes that China should improve the guidelines of relevant standards,enhance the professional competence of auditors and strictly check the quality of control.The contribution of this paper is to construct a key audit matter evaluation system based on the quality characteristics of accounting information and the characteristics of auditing work,and use this evaluation system to evaluate the quality of key audit matters.At the same time,the key audit matters disclosed by British public companies for three consecutive years have been carried out.Analyze and draw on its experience to make recommendations on the disclosure of key audit issues in China,and promote the regulatory authorities to be more directional in the quality review of key audit issues,to help information users obtain more information and assist investors in making decisions.The shortcoming of this paper is that the selected samples are insufficient,and more samples can be used for further analysis.