Analysis Of The Reasons For Discrepancies In The Disclosure Of Key Audit Matters Of Cross-listed Companies

In recent years,many countries(regions) around the world have begun to examine the shortcomings of the original audit reports and have successively revised them.The main point of the revision is to add a key audit matters(Key Audit Matters,hereinafter referred to as KAM)section.KAM needs to be disclosed to the public to improve the deficiencies of the existing audit report and help stakeholders in the audit report to obtain more information related to decision-making.Information,obtain incremental information,and help them understand in-depth matters involving major management judgments in the audit report of the audited company.Since the United Kingdom was the first country to implement audit report reform,with the introduction of the British KAM standard,Hong Kong,China also issued the HKSA701 standard in December 2015.Therefore,my country's new auditing standards were issued late,and the disclosure of key audit matters is in line with other capitals.There are certain differences in the market.The research methods of this article include case study methods,etc.,to analyze the institutional background and theoretical basis of key audit matters,the descriptive statistics of KAM for A+H-share cross-listed companies over the years,the reasons for the discrepancies between KAM's A and H-share disclosures,and audit response analysis.And put forward relevant policy recommendations and research limitations.Specifically,this article will select all companies of A+H share cross-listed companies as of 2019,analyze the number and content of KAM of these cross-listed companies,conduct a vertical comparison between years,and study all cross-listed companies two years after the promulgation of Standard 1504 Changes in the number and classification of KAM;in addition,compare the differences in the disclosure of key audit matters for the A and H shares of the same company in the same year;finally,summarize the differences between the companies that disclosed KAM in A and H shares from 2017 to 2019.Select the most representative Yanzhou Coal Industry(stock code:600188)among the companies for case analysis.A detailed comparison of the KAM in the audit reports of Yanzhou Coal's A and H shares found:1.The number of KAMs disclosed by Yanzhou Coal in H shares is 4-5,and the number of KAMs disclosed in the A-share market is about 1-2;In the description of KAM,accounting firms in the Mainland will use numbers to assist users of financial statements to understand the importance of the event,while accounting firms in Hong Kong,China did not use numbers to correct this when describing each KAM.Disclosure of matters;2.In terms of different KAM disclosure reasons,mainland accounting firms will pay attention to whether this incident actually occurred and whether this matter involves multiple definite conditions;and Hong Kong,China's accounting firms are better than those in the Mainland.The firm is more able to discover the abnormalities between the Yanzhou Coal Industry and the industry average,and will pay more attention to the company's potential risks in the industry.For example,when the accounts receivable turnover period is much smaller than the industry average,it will be more important.Pay attention to the credit risk of the enterprise;in addition,it will pay more attention to whether this matter will have a significant impact on the financial report to confirm KAM,that is,focus on theoretical assumptions and relevant management judgments,which are more in line with the rigorous judgment of the auditors 3.In response to the same KAM,the mainland auditors will increase the degree of on-site inspections and post-mortem inspections of management disclosures,etc.,which meets the prudential requirements of certified public accountants and can be used as incremental information to provide financial report users with the current audit KAM's latest information,which is not included in the KAM disclosures disclosed by the Hong Kong firm of China;4,From the perspective of different market environments,it will not affect the disclosure of key audit matters.In addition to the above-mentioned reasons for the different disclosures of key audit matters,it is also possible that my country's 1504 standard has been implemented for too short a time and insufficient experience,and the implementation and supervision of the 1504 standard by the regulatory agencies is still in the exploratory stage,leading to the implementation of the 1504 standard Did not achieve the original intention.In view of this,my country should strengthen the training of audit-related personnel to ensure that the disclosure of KAM meets the requirements of the standards;secondly,the key to improving the information content of KAM lies in the need for accounting firms to have complete control over the quality of KAM disclosures and improve the firm's The quality control system is to conduct quality control throughout the determination and response of KAM;finally,the regulatory agency should strengthen supervision and reduce the gap in audit expectations.