Variables | Definitions | ||

Kam | Firm_level | Kam_num | Number of key audit matters issued by each company each year |

Length_sum | Sum of character lengths for all key audit matters issued by each company each year | ||

Length_unit | Length_sum/Kam_num | ||

Specificity1_sum | Sum of figures of all key audit matters issued by each company each year | ||

Specificity1_unit | Specificity1_sum/Kam_num | ||

Specificity2_sum | Specificity1_sum/Length_sum | ||

Specificity2_unit | Specificity1_unit/Length_unit | ||

Ind_spec_sum | Each company is defined as the sum of the number of industry-specific key audit matters each year | ||

Kam_level | Length | Sum of text length of each key audit matter description paragraph and response paragraph | |

Specificity1 | The sum of the numbers in the description paragraph and the response paragraph of each key audit matter | ||

Specificity2 | Specificity1/Length | ||

Ind_spec | When the key audit event is an industry-specific key audit matter, take 1; otherwise, take 0; In a certain industry in each year, the total number of occurrences of a key audit matter is divided by the total number of companies in the industry in that year. If the ratio is greater than 50%, the event is determined to be an industry-specific key audit matter | ||

Audit_firm | Big 4 | When the firm is among the four largest in the world, the variable is 1 | |

Big 8 | When the firm is the eight largest in China, the variable is 1 | ||

Audit_firm _spec | Firms with industry expertise, variable is 1 Variables are defined as follows: ${\text{IMS}}_{ik}={\displaystyle \sum _{j=1}^{J}{\text{REV}}_{ikj}}/{\displaystyle {\sum}_{i=1}^{I}{\displaystyle {\sum}_{j=1}^{J}{\text{REV}}_{ikj}}}$ The numerator is the audit fee charged by I accounting firm to the clients of industry K, and the denominator is the audit fee of all clients of industry K. when the IMS of the firm is more than the median of industry IMS, it is defined that the firm has industry expertise, and the variable is 1 |