Does Key Audit Matter Strengthen Earnings Usefulness?

• Main Authors: Shih-Yang Chen, 陳仕洋
• Other Authors: Guan-Syun Wu
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/4z4fg4

碩士 === 中原大學 === 會計研究所 === 106 === When the audit report reveals the key audit matter (KAM), it will affect the company''s stock compensation. At the same time, investors will also use the results of the audit report to evaluate the company''s financial information to determine the reliability of the company''s financial information, and make predictions for the future earnings. In order to make it easier for investors to read the audit report, we suggest that the audit report should reveal the key audit matter (KAM). This paper uses model crated from (Collins,Kothari, and Sloan 1994) to test whether companies that can disclose key audit matter (KAM) in a single year in 2016. We explore when the audit report reveals key audit matter (KAM) whether they can strengthen the usefulness of accounting earnings or not. Importantly, we find that the usefulness of accounting earnings can be enhanced when key audit matter (KAM) involve income, goodwill or intangible assets. However, if the income tax expense is involved, it does not enhance the usefulness of accounting earnings. The results of the study also show that key audit matter (KAM) are reported. The large number of words does not enhance the usefulness of accounting earnings.