Key audit matters and stock price synchronicity: Evidence from a quasi-natural experiment in China

Zhai, H; Lu, M; Shan, Y; Liu, Q; Zhao, Y

Key audit matters and stock price synchronicity: Evidence from a quasi-natural experiment in China

Zhai, H Lu, M Shan, Y

Liu, Q Zhao, Y

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Publisher:: Elsevier BV
Publication Type:: Journal Article
Citation:: International Review of Financial Analysis, 2021, 75, pp. 101747-101747
Issue Date:: 2021-05-01

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Field	Value	Language
dc.contributor.author	Zhai, H
dc.contributor.author	Lu, M
dc.contributor.author	Shan, Y https://orcid.org/0000-0003-2156-8722
dc.contributor.author	Liu, Q
dc.contributor.author	Zhao, Y
dc.date.accessioned	2021-12-21T00:11:50Z
dc.date.available	2021-12-21T00:11:50Z
dc.date.issued	2021-05-01
dc.identifier.citation	International Review of Financial Analysis, 2021, 75, pp. 101747-101747
dc.identifier.issn	1057-5219
dc.identifier.uri	http://hdl.handle.net/10453/152428
dc.description.abstract	The recent requirement to disclose key audit matters (KAMs) in audit reports aims to improve audit quality and provide extra information to external users. Using a quasi-natural experiment in China and the difference-in-differences approach, we document causal evidence that KAM disclosures provide incremental firm-specific information and reduce stock price synchronicity. The effect of KAM disclosures is more pronounced in firms with controlling shareholders and fewer institutional shareholders. Overall, the findings suggest that KAM disclosures reduce information acquisition costs and facilitate firm-specific information impounded in price, especially when such information is less accessible to outside shareholders.
dc.language	en
dc.publisher	Elsevier BV
dc.relation	http://purl.org/au-research/grants/arc/DP180100388
dc.relation	http://purl.org/au-research/grants/arc/DP210101354
dc.relation.ispartof	International Review of Financial Analysis
dc.relation.isbasedon	10.1016/j.irfa.2021.101747
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment, 1801 Law
dc.subject.classification	Finance
dc.title	Key audit matters and stock price synchronicity: Evidence from a quasi-natural experiment in China
dc.type	Journal Article
utslib.citation.volume	75
utslib.for	1501 Accounting, Auditing and Accountability
utslib.for	1502 Banking, Finance and Investment
utslib.for	1801 Law
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access	*
dc.date.updated	2021-12-21T00:11:49Z
pubs.publication-status	Published
pubs.volume	75

Abstract:

The recent requirement to disclose key audit matters (KAMs) in audit reports aims to improve audit quality and provide extra information to external users. Using a quasi-natural experiment in China and the difference-in-differences approach, we document causal evidence that KAM disclosures provide incremental firm-specific information and reduce stock price synchronicity. The effect of KAM disclosures is more pronounced in firms with controlling shareholders and fewer institutional shareholders. Overall, the findings suggest that KAM disclosures reduce information acquisition costs and facilitate firm-specific information impounded in price, especially when such information is less accessible to outside shareholders.

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http://hdl.handle.net/10453/152428