The Influence Analysis Of Auditors' Concerning Areas On Audit Opinion Appropriateness

In recent years, a series of financial failures and financial fraud has frequently occurred at home and abroad, those caused people to question Arthur Andersen as the representative of the international five big Accounting Firms, and auditors encountered an unprecedented embarrassment. But with the prosperous development of capital market, any information of the capital market is paid attention to by various outsiders. Therefore the audit opinion gave by auditors will affect various outsiders. Auditors has played more and more important role in the capital market. The types of audit opinions have become research targets of many researchers because of their importance. So what kind of audit opinion is expected by various outsiders? The audit opinion gave by auditors is appropriate or not? In order to achieve the target of appropriate audit opinions issued and reduce audit risk, auditors should focus on what areas? As the consideration of these issues that form the motivation of this research.This thesis first we conclude the features of the listed company's financial failure, according to the causes and mechanism of financial failure. Then we make empirical test of the main incentives for financial failure, and we found that the company's financial failure can provide valuable clues to what areas auditors mainly focus on. Next we make further study around what areas the auditor should focus on, we can obtain the impact of various factors to the appropriate audit opinion issued by the auditors. The conclusions indicate that: the proportion of independent directors,company size are significantly positive correlated to the appropriate standard unqualified audit opinion, the company is subject to punish or not, asset-liability ratio are significantly negative correlated to the standard audit opinion. But earnings management, ROE are not significantly correlated to the appropriate standard audit opinion. Finally, we conclude the common areas of auditor concern on from the above studies. We can sum up that the company's financial condition and business performance, internal governance structure and external supervision are the factors gave by fully considered when the auditors make audit opinion.In this thesis, we further define other areas the auditors should focus on, integrate with the result issued by previous research scholars. We provide valuable policy recommendations in order to really improve the audit quality, make an appropriate audit opinion and reduce audit risk.