An Empirical Study On The Opinion Shopping And Advice Of Regulatory

Opinion shopping becomes the focus that the theory circle and the practice circle pay close attention to, for its potential unfavorable economic consequence. In recent years, we have obtained comparatively rich achievements in positive research. However, almost all of the"opinion shopping"research turn to"auditor switching"research. They lose sight of it is a possibility that the manager can"buy"opinion from the incumbent auditorAs we know, there are high start-up costs on initial audit engagements. When company switches the auditor, it will be a high audit fee for new auditor to equalize their start-up cost. In addition, Securities and Exchange Commission pays more attention to auditor switch, the"seller", auditor may ask more auditor fee to compensate the risk cost. So, as a rational manager, it is more reasonable for buying opinion from the incumbent auditor than from the new auditor. Apropos of weather the manager buy opinion from the incumbent auditor or from the new auditor, it depends on the price of opinion shopping; the possibility of success; the extent that administers pay attention to and the effect on share price. Accordingly, it is opportunity for us to study opinion shopping in two different ways. One way is auditor fee, the other is auditor switch. So we could obtain further comprehend to auditor switches on Chinese security market and offer experimental data for effective regulatory.Therefore we choose A-share companies listed on the Shanghai and Shenzhen stock exchange during the period 2004, and use Logistic Regression Model to analyze impacts of auditor fee and auditor switch on opinion shopping based on forefather's researches. We find that it is remarkable relation between auditor fee variables and opinion shopping.So we can draw a conclusion that manager can actualize opinion shopping though increasing auditor fee in 2004. But we discover that it isn't remarkable relation between auditor switch variables and opinion shopping.