A Study Of The Economic Consequences Of Key Audit Matters

In order to meet the new requirements of the reform and development of capital market and meet the increasing information demand under the background of complex economy,in December 2016,new audit reporting standards were issued.The key audit matters were disclosed,and a step-by-step plan was adopted.It was the first to implement the A+H shares and H shares on January 1,2017.The implementation scope has been extended to all listed companies since January 1,2018.Therefore,from the perspective of accounting firms,this paper studies the influence of key audit matters on audit quality,audit fees and audit delays.This paper selects the data that disclosed key audit matters in the audit report after the implementation of the standards from 2016 to 2018.The text analysis method and Python are used to obtain indicators such as the number,complexity and sufficiency of key audit matters.The specific impact of key audit matters' disclosure is analyzed from different perspectives.After research,it was found that:(1)The more the number,the higher complexity and sufficiency of key audit matters,the better audit quality of accounting firms.When the financial distress of the audited company is more serious,the improvement of audit quality is more significant.(2)The more the number,the higher complexity and sufficiency of key audit matters,the more audit fees of accounting firms,and the audit tenure has a moderating effect.(3)The number and sufficiency of key audit matters are positively related to audit delays,but complexity is irrelevant to audit delay,and the impact of disclosure on audit delay is more obvious in enterprises with higher customer importance.(4)Disclosure of asset impairment,income recognition and equity investment matters in the key audit matters will improve audit quality and increase audit fees,and disclosure of asset impairment matters and income recognition matters will make the audit delay longer,but equity investment matters have no impact on audit delay.Compared with the existing literature,the paper explores impact of the number,complexity,and sufficiency of key audit matters on audit quality,audit costs,and audit delays.In addition,adjustment variables are added for further analysis.The impact of different types of key audit matters is also studied.It is helpful for accounting firms to better carry out auditing work and deepen their understanding of key auditing matters,which is of some innovative and enlightening significance.