We examine whether political forces in Chinese State-Owned Enterprises(SOEs) influence audit reporting, and in particular the disclosure of Key AuditMatters (KAMs). We test two competing predictions that offer alternativeexplanations on the relation between SOEs and KAM disclosures. Using a sampleof Chinese listed firms over 2016 - 2020, we document that SOEs have fewer KAMsin their auditor reports. This result suggests that SOEs have strong politicalmotives to avoid negative news by colluding with auditors and affecting theiroutput. Our baseline finding is robust to sensitivity analyses that addressendogeneity concerns. Further, we show that the aforementioned effect is morepronounced when SOEs have a politically connected Chairman, more concentratedstate ownership, and tunneling related party transactions. Overall, our studyprovides evidence on how political institutions affect audit practices.