Do key Audit Matters Differently Impact Accrual Earnings Management or Real Earnings Management?

——Evidence from China Based on Text Analytics

DOI

10.2991/978-94-6463-676-5_4How to use a DOI?

Keywords

earnings Management; New Audit Report Standards; Key Audit Matters

Abstract

This study investigates the effect of a new auditing standards (No. 1504) promulgated by the Ministry of Finance of China in December 2016, which requires auditors to disclose Key Audit Matters (KAM) and related opinions in the audit report. Using data of A-share listed companies in China from 2016 to 2020 through text analytics and manual comparison, this study provides evidence that KAM disclosure decreases companies’ earnings management, especially in the form of real earnings management. This effect is stronger with the increase of the number of KAM disclosed. This study adds to the literature that audit report and provides transparency signals for investors and regulators.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Ziling Liu
PY  - 2025
DA  - 2025/04/15
TI  - Do key Audit Matters Differently Impact Accrual Earnings Management or Real Earnings Management?
BT  - Proceedings of the 2024 6th Management Science Informatization and Economic Innovation Development Conference (MSIEID 2024)
PB  - Atlantis Press
SP  - 26
EP  - 32
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-676-5_4
DO  - 10.2991/978-94-6463-676-5_4
ID  - Liu2025
ER  -