Research On The Implementation Effect Of Key Audit Matters

In recent years,the traditional audit report format and content have been questioned by all sectors of society because of the small amount of information it contains.Investors believe that the current standard traditional audit report has been unable to obtain more information related to investment decisions.With the continuous reform and improvement of the modern social market economic system,the role of the audit report is becoming more and more important.In response to the strong demand of audit report users,the Ministry of Finance issued a new audit report standard in December 2016.It is required to increase the disclosure of “key audit matters” in the audit report.This adjustment will help improve the transparency of audit work,improve the company's management level and fairness of financial statements,reduce the information processing cost of investors,and improve the efficiency of capital market information.The phenomenon of “stock price synchronization” in the capital market,that is,the fluctuation of stock price with the fluctuation of the market or industry “same rise and fall” phenomenon,the occurrence of this phenomenon hinders the realization of the economic development goals of the new era,and also affects the capital market.Stable and orderly development.In theory,the implementation of key audit issues has improved the efficiency of investor information processing,so that the stock price fully reflects the true value information of the company,thus inhibiting the phenomenon of stock market synchronization.However,the implementation effect of a new policy needs to be tested by practice.It is especially important to study the implementation effect of key audit issues from the theoretical and empirical aspects.Therefore,based on the previous studies,this paper synchronises the stock price from the Chinese capital market.Perspective,empirical analysis of the implementation of key audit issues.This paper firstly reviews the two different viewpoints of stock price synchrony and the results of experimental research and empirical research on the implementation of key audit issues,and then reviews the research literature on information disclosure and stock price synchronization..Then it conducts theoretical and statistical analysis on the reform of the new audit reporting standards and the implementation of key auditing matters.Then,based on the theory of effective market theory,signal transmission theory and information asymmetry,combined with the characteristics of China's capital market,the key auditing items are analyzed.The implementation of the theoretical analysis of the impact of the stock market synchronization phenomenon.Based on this theory,this paper selects the 2015-2016 A-share listed company as a research sample,and uses the A+H-share listed company that implements the key audit issues for the first time as a quasi-natural experimental scenario to test the key audit issues for the capital market stock price.The impact of synchronicity and the mechanism analysis based on the different paths of auditors,analysts,and CEOs' political backgrounds.At the same time,it also examines the information content of key audit matters,and the impact of different types of key audit matters on capital market synchronicity.In the 2018 year,the key auditing issues will be fully implemented to conduct a comparative study of the 2017 annual report data and the 2015 annual report data to explore the impact of the full implementation of key audit issues on stock price synchronicity.The research results of this paper show that the implementation of key audit issues can effectively restrain the stock market synchronization phenomenon in the capital market.The increase of information content of key audit matters can effectively suppress the stock market synchronization phenomenon;inventory and non-current assets impairment,revenue recognition,Liabilities and contingent events can effectively suppress the stock market synchronization phenomenon;compared with the non-big ten accounting firms,the key audit issues provided by the Top Ten are more effective in suppressing the stock market synchronization phenomenon;For companies with low fees,the key audit issues provided by companies with high audit fees are more effective in curbing the phenomenon of stock market synchronisation in the capital market;compared to the companies with small analysts tracking,the analysts track the critical audits provided by companies with a large number of companies.The effect of the issue on suppressing the synchronicity of stock prices in the capital market is more significant;compared with the CEOs of politically-linked CEOs,the key audit matters provided by the non-politically-linked CEO companies are more effective in curbing the stock market synchronic phenomenon in the capital market;In addition,the study also found that compared to the first year of implementation Section on audit matters affecting the stock price synchronicity,the effect of inhibiting full implementation of the capital market stock price synchronicity phenomenon is more pronounced.