Audit committee-auditor interlocking and disclosure of key audit matters

The key audit matters in audit report can improve the communication effect and narrow the information gap. The interlock relationship between audit committee and auditor based on cooperation and trust will affect the whole process of communication between auditor and management, and thus affect the disclosure of key audit matters. This article examines the impact of audit committee-auditor interlocking relationship on disclosure of key audit matters. The findings suggest that audit committee-auditor interlocking can improve the adequacy of key audit matters. The conclusion is still robust after controlling the selectivity bias caused by observable factors.