The Research On The Impact Of The Text Features Of Key Audit Matters On Analysts Earnings Forecast

At the end of 2016,the Ministry of Finance of my country officially issued CSA1504,requiring auditors to communicate key audit matters in audit reports.As the main means of audit report reform,key audit matters can provide securities analysts with richer high-quality information,thereby reducing the cost of obtaining and analyzing information for analysts.So what key audit matters are valid for analysts?Did the key audit matter come to the analyst’s attention?This study uses A-share listed companies from 2017 to 2020 as a research sample,and uses computer language processing technology to study the impact of key audit matter text features on analysts’ earnings forecasts.The research has the following findings:(1)The text similarity differences of key audit matters can provide analysts with incremental information with individual company characteristics,which can help analysts make better earnings forecasts.Therefore,analysts’ earnings forecasts are more accurate when the text similarity of key audit matters is lower.(2)The study also found that the proportion of complex words and the average sentence length in the key audit matter texts will have an impact on the information analysts obtain.Greater readability increases the efficiency of information delivery,which in turn improves the accuracy of analysts’ earnings forecasts.(3)The above situation only occurs when the accounting firm has industry expertise.(4)The above conclusion is only established when the quality of information disclosure of listed companies is poor.(5)Only when analysts’ earnings forecasts are optimistic forecasts,the textual features of key audit matters have a corrective effect on them.(6)The text tone of key audit matters has no significant impact on analysts’ earnings forecasts.(7)The usefulness of the incremental information reflected by the textual similarity of different categories of key audit matters to analysts’ earnings forecasts is different.In addition,this study also uses statistical research methods to study the categories of disclosed matters It is found that the categories of key audit matters are mainly affected by policy implementation and major economic events.In addition,for listed companies in different industries,the categories of key audit matters are also different.And for different accounting firms,there are also different preferences in the selection of key audit matters.