Variable  Variable definitions 
Explained variable 

Inst  On June 30, 2008, the shareholding ratio of institutional investors in the company 
Explanatory variables (characteristic variables of critical audit matters) 

Num_cam  The number of critical audit matters 
Freq_num  The average value of proportion of the numerical value contained in each critical audit matter (the total value of each proportions divided by the number of critical audit matters of the company) 
Freq_per  The average value of proportion of the percentage value contained in each critical audit matter (the total value of each proportions divided by the number of critical audit matters of the company) 
Freq_spe  Specific critical audit matters, the average value of proportion of the company’s specific critical audit matters to the company’s number of critical audit matters (define the company’s specific critical audit matters as critical audit matters whose probability of occurrence is less than 50%) 
The Form  Format of disclosure of critical audit matters: define company with tabular as 1, textual narratives as 0. 
Control variable 

$Ins{t}_{t1}$  On June 30, 2017, institutional investors in the company’s shareholding 
(1) company characteristic variables (9) 

Lev  The company’s assetliability ratio 
Eps  Basic earnings per share of the company 
Ocfps  Operating cash flow per share of the company 
The Size  The logarithm of a company’s total assets 
Price,  Yearend closing price 
Divi  Whether the company pays cash dividends at the end of the year: define company with dividend as 1, otherwise as 0. 
The State  Define the property right of the company is 1 for stateowned company and 0 for nonstateowned company 
Opi  Audit opinion. Define a clean report as 1, otherwise as 0. 
Big 4  Accounting firm. Define the company audited by international big 4 accounting firm as 1, otherwise as 0. 
(2) industry control variables (21) 

Sic 2  According to the industry classification of China securities regulatory commission in 2012, the industry types are controlled 