Research on the Impact of Disclosure of Key Audit Matters on Corporate Financing Constraints

This paper studies the impact of key audit disclosures on corporate financing constraints through empirical analysis. Although the disclosure of key audit matters can help to reduce the information differences between management and investors and improve the audit quality, such disclosure may also be regarded as a risk signal, and the warning function to investors may cause the difficulty of corporate financing to increase. This study concludes that the increase in the number of key audit disclosures will make corporate financing more difficult. When an enterprise announces more key audit matters, the market may regard them as a stronger risk signal, causing investors to be more cautious in making investment decisions, thus increasing the financing difficulty of the enterprise. However, in companies with large board sizes, the disclosure of key audit matters can alleviate the financing constraints. Larger boards are more likely to make the right decisions and therefore may disclose fewer risky aspects of key audit matters. This study provides a new understanding of key audit issues in financing activities and a useful reference for the possible impact of macro-policy adjustments on corporate profitability. In addition, the research also provides useful information support for enterprises to understand and adapt to the new auditing standards.