Empirical Study On Board Characteristics And Audit Opinion

Audition opinion, concluded in the audit report, is the most centralized and concise expression of the CPAs'work results and is reflected in the audit report. The roles of the CPAs are to audit the financial statements of the listed companies and see if they are real, legal and complied, and thus increase the reliability of the accounting information. However, with series of business financial scandals like Enron, which seem to expose the decrease of the quality of accounting information but actually the administration problems of the board.When it comes to modern enterprises system, the effects the board makes in the operation of the company as well as their relationship with other parts of the company are the central task and the important guarantee for a working company system. For the last half century, the board of directors has been the focus of finance. The board of directors is the most important core of a company's govern since it is a significant policy-making body, a supervisory organ, as well as the main regulator of the quality of financial information. The high efficient board of directors will definitely improves the efficiency of management and therefore greatly improves the quality of accounting information. However, when compared to the western companies, we still lag behind both in deepness and breadth.Combining the real situation of listed companies, basing on the related theories and by using positive analysis, the essay has done a research on the characteristics of listed companies'board of directors and the related problems of audit opinions. The purpose is to try to change the types of listed companies'audit opinions. The main content of the text is as follows:Opinions and quality of accounting information. Literature review is about board characteristics, audit opinion and the quality of accounting information, the essay analyzed the relevant theoretical relationship between board of directors and audit opinions. On one hand, the essay states that the essential target of audit is to ensure the effective performance of commissioned economic responsibilities. Audit opinion is the result of auditing, and it's affected by many factors like listed companies, accounting firms and the supervising environment. The main factor should be the quality of the company's accounting information. That is why we say the quality of accounting information affects the results of audit opinions. On the other hand, the essay discusses that being the administrative center, the board of directors is the main supervisory agent of the accounting information who is responsible for stimulating and restraining managers in order to ensure the reliability of accounting information. That is why people say the administration of board of directors is the key factor that influences accounting information. All in all, the administration, decision-making, supervision and the operating effectiveness of board of directors determine the quality of the company's published accounting information, and consequently influence the audit opinion given by CPAs.Next is the positive research of board of directors and audit opinions. By doing research on the following characteristics of board of directors and its relationship with audit opinions, the essay afford assumptions for the positive analysis: structure of board of directors (the scale of board of directors and the proportion of independent director, the situation of director holding two or more posts concurrently tec.), the behavioral characteristics of board of directors (the frequency of annual meetings), stimulating characteristics (annual award of directors), stability characteristics (including the modification of board of directors and its scale). Using empirical research methods, the audit opinion of the data listed companies in 2009 will be analysised by descriptive terms, Pearson correlation analysis and Logistic regression analysis. The regression analysis helps reaching a conclusion: the scale of board of directors, the frequency of board meetings, the modification of its scale and the chairman of the board all have a positive correlation with nonstandard audit opinions. The payment of board of directors has a negative correlation with nonstandard audit opinions. There is no significant correlation between Chairman of the board and the board of directors holding two more posts as well as between independent director and nonstandard audit opinions.Finally is the conclusion of the empirical study. The essay put forward policy suggestions from two perspectives. On one hand, to help board of directors of listed companies improve the quality of their accounting information, which conclude five parts: to choose properly scale of board of directors, appropriately separate chairman of directors and general manager, improve the independent directors systems, improve the efficiency of meetings of board of directors and perfect the system of stimulating and restraining board of directors. On the other hand, to give suggestions about regulating the audit opinions of listed companies, including improving the administration of the company, strengthen the supervisory function of CPA and increase the supervision and punishment of CSRC.