Does Disclosure Of The KAMs Increase Information Utilization Value For External Users?

As an important system to safeguard the economic order of the capital market,the audit report plays a key role in the audit system.The audit report is an important carrier to reflect the performance of the audit responsibilities of the CPA and the communication with the information users.The quality of the information content is of great significance to the healthy development of the capital market.In December2016,the Ministry of Finance issued a circular on 12 audit standards,including Standard 1504,which mandated auditors to disclose key audit matters of listed companies in their audit reports and increased the communication value of audit reports.In order to test the information value of external users since the implementation of the policy on key audit items,the research question of this paper is put forward: whether the disclosure of key audit items increases the information utilization value of external users(analysts and investors)in the two categories of capital market.Based on this,this paper takes the new audit report standard as the background of implementation for many years.Based on information asymmetry theory,principal-agent theory,signal transmission theory and audit insurance theory,this paper analyzes the research problem mechanism and proposes research hypothesis,and explores the information value of key audit matters information content to external users after this reform.That is,the impact on the accuracy of analysts’ forecasts and the extraordinary turnover rate of investors.This paper selects 10396A-share annual companies that have received standard unqualified audit opinions since the full implementation of the key audit matters criteria in 2017 as test samples to explore the impact of the specific content of key audit matters disclosure on the accuracy of analysts’ forecasts and the extraordinary turnover rate of investors,and uses the fixed effect model for empirical regression test.The empirical test results show that key audit items have information value to external users of information:More disclosure of key audit matters,more details and more risk information can improve the accuracy of analysts’ forecast.More disclosure of key audit matters,more detailed information,more positive tone of conclusive evaluation and more risk information will increase the extraordinary turnover rate of investors.Subsequent extensive research showed that the value of this information was more pronounced in groups with low corporate transparency or high auditor industry expertise.Based on relevant conclusions,this paper puts forward corresponding suggestions from the perspectives of policy makers and regulators,analysts,investors,auditors and audited parties.(1)Policy makers should timely obtain feedback on implementation,strengthen the disclosure standards of key audit matters,and regulators should pay attention to the implementation role of policies and possible related problems;(2)Analysts should explore more information analysis channels,constantly improve their professional ability,strengthen the ability to interpret key audit matters and other information,and the country should also strengthen the overall construction of the analyst industry;(3)Investors should improve the identification and sensitivity of enterprise risk information,maintain reasonable audit expectations,pay attention to key audit matters,but also combine with other information for comparative analysis;(4)The auditor shall improve the understanding and learning of relevant policies,strengthen the combination of theoretical knowledge and practical experience,and the auditee shall strictly abide by the requirements of the new standards,improve the transparency of disclosure information,and pay attention to the impact of key audit information on the capital market.