Research On The Disclosure Of Key Audit Matters Based On Professional Judgment

The audit report is not only the achievement of the audit work,but also the carrier of recording the information that auditor want to deliver to the report users.Since the outbreak of international financial crisis,investors realized that original reports could not satisfy their needs of investment decisions,many countries bagan to revise the audit report in order to provide more information.In 2015,the International Auditing and Assurance Standards Board revised the auditing standards.On December 23,2016,China issued new standards.The biggest change of the revised standards is the disclosure of Key Audit Matters.Key audit matters are those matters that,in the auditor's professional judgment,were of most significance in the audit of the financial statements of the current period.Disclosure key audit matters can increase the transparency of auditing work,it can also improve the information of audit report.Auditor determine the key audit matters according to their judgment.Since auditors' judgment is subjective,when the subject or object of judgment changes,the result will be different.My research analyzes the disclosure of key audit matters of 93 A+H shares for three consecutive years from different point of view.Meanwhile,it makes a specific analysis of the Coal Washing Industry as a case to explore the impact of the judgment subject and object on key audit matters.A+H shares have disclosed Key Audit Matters for three consecutive years.The disclosed items and quantity remain stable.The disclosure items mainly focus on impairment,enterprise merger and long-term investment,income recognition,assets and liabilities and contingent liabilities,and the number of disclosed items remains around 230.The disclosure of key audit items has obvious industry characteristics.In terms of quantity,the average disclosure amount of financial enterprises is much higher than other industries;different industry focus on different matters,for example,manufacturing industries always choose the impairment as key audit matters,Finance industries is different from manufacturing industries.There are differences among accounting firms in the disclosure of key audit matters.First,the same firm adopts the same disclosure format.Secondly,there are differences in the number and matters of communication,for example,EY and KPMG generally identify more key audit matters than other firms,and in the disclosure of key audit matters of the financial industry,DTT pays more attention to matters related to impairment and enterprise merger,while EY pays more attention to assets.Finally,the same firm has a high degree of similarity between the description of the same event and the audit response procedure.Through the study of three enterprises in the Coal Washing and Selecting industry,the following conclusions are drawn: non-current assets are the main part of the assets in the industry,so the matters related to the non-current assets are more likely to be identified as key audit matters;Different firms disclose different details of the same key audit items,resulting in different information content in the key audit items;Successive years of similar disclosures do not provide incremental information.The contribution of this paper is to study the disclosure of key audit matters of93 listed companies A+H shares from the perspectives of professional judgment subject and object of professional judgment of certified public accountants.The disclosure of key audit matters has obvious characteristics;Different firms focus on different matters and convey different information through key audit matters.Through the comparison and analysis of the specific contents of key audit items disclosed by three listed companies in the coal washing and selection industry,it is found that: the information disclosed by key audit items is limited;It is difficult to obtain incremental information when continuous disclosure.The deficiency of this paper lies in: to study the continuous disclosure situation this paper only select the disclosure of A+H shares for three consecutive years 93 listed companies as samples,the situation about to disclose to the industry and firm studies due to sample size limit can only select parts industry and firm,less sample size.