Abstract
[Purpose] Since the introduction of the core audit system, a decrease in information asymmetry and an increase in audit quality have a positive effect on corporate value, and investors‘ disappointment in key audit matters and key audit matters such as accounting violations have a negative impact on corporate value. This research aims to analyze the impact of introduction of key audit matters(KAM) on earning response coefficient(ERC) for the company in the order industry since 2016. In addition, analyzing the difference of the ERC between order industry companies that report KAM and those do not report.
 [Methodology] this research analyzes if there is a difference in the ERC before and after the introduction of KAM. In addition, this research uses propensity score matching estimation(PSM) method, matching companies that reported KAM in the order industry with companies of similar characteristics but did not report KAM since 2016. And analyzes if there is a difference in the ERC between the two enterprise groups.
 [Findings] And the results are as follows. Firstly, compared to the past, there is a deduction of ERC in the order industry after the introduction of KAM. Secondly, companies who report KAM have a lesser ERC compared to companies who do not. As KAM is the most important matters during the auditing process of the financial statements, and it related to the risk of the enterprise. Therefore this research indicates the lack of ability to analyze the information of KAM from the investors may interfere with their investment decision, making them revaluate the risks of the company and loss of trust as a result.
 [Implications] This result is believed to have been caused by differences in expectations felt by investors as information on significant risks was forcibly disclosed with the introduction of the core audit system. Through this study, the information asymmetry was alleviated after the introduction of the core audit system, and the market value of the order-taking industry before the introduction of the core audit system could be overestimated.
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