Empirical Research Of The Relationship Between Modified Audit Opinion Of Chinese List Companies And Stock Price

As we all know, information is the cornerstone of the healthy development of the securities market, the quality of information will directly affect on the effectiveness of decision-making. As a response to the intrinsic value of the company's financial situation, operating results, and cash flow, the quality of those information will become a investor's concern. Based on the limit of their own expertise knowledge and the high cost of identifying information, the investors are difficult to judge the quality of accounting information. Certified public accountants play a "police" role of the securities market, the audit opinion on financial reports of listed companies being the credibility identification results of the financial reports of listed companies, naturally plays a decisive role for the investor's decision-making. However, because of the information asymmetry between Certified public accountants and investors, as well as the limited rational investors, the audit opinion is not necessarily has significantly different market reflection on stock price. Many scholars at home and abroad have conducted this research, but the research has not been unanimous conclusion. With the introduction of China's two laws and new auditing standards, share reform implementation, the development of hot stock shares, compared with the previous studies, whether the relationship between the modified audit opinion and the stock price has been a change? Whether the modified audit opinion has the value? Whether the relationship between the modified audit opinion and the stock price has a different market reaction for the stock market, times, the type of advice are different?Concerning the above issues, on the basis of theoretical analysis about in the audit commissioned by the agency theory, investors, the audit opinion and the relationship between the stock, the paper analyzes the audit opinion in connection with the changing of audit laws and regulations .then the paper samples 136 listed companies issued the modified audit opinion and 136 listed companies issued the standard audit opinion in strict accordance with the selection criteria ,and has a empirical analysis on them. Empirical Analysis mainly adopt cumulative abnormal return analysis and multielement regression analysis, the following assumptions were analyzed: (1) the stock price has a different market reaction to the different types of modified audit opinion and qualified audit opinions; (2) stock price has a different market reaction to the unqualified audit opinion and qualified audit opinions with explanatory notes; (3) whether stock price has a different market reaction to modified audit opinion based on different share market and different year; (4) stock price has a different market reaction to modified audit opinion repeatedly and modified audit opinion firstly. At the same time in the graphic analysis, the paper analyzes whether the stock market in China has reached semi-strong efficient. The Empirical Analysis come to the following conclusions: (1) the market reaction between different types of modified audit opinion and qualified audit opinion is different, and the modified audit opinion has a negative market reaction (2) the unqualified audit opinion and qualified audit opinions with explanatory notes has no obvious difference(3) stock price has no different market reaction to modified audit opinion based on different share market, but has an significant, the modified audit opinion from the 2006 make the stock price decline in more obvious (4) stock price has no different market reaction to the modified audit opinion disclosured firstly and the modified audit opinion disclosured repeatedly (5) the notice of predicting having a loss and suspending the listing risk warning have an obvious explanation to cumulative abnormal return; (6) investors can predicate the type of audit opinion (whether is qualified audit opinion), but have excessive reaction ahead to the qualified audit opinion and inadequate reaction to the modified audit opinion, China's stock market not yet reached semi-strong efficient completely. Then, the paper makes three suggestions following: enhancing investor's education and protection, strengthening the supervision of the audit and penalties, steping up the supervision of listed companies, and finally points out some limitations of this study and suggestions to the later study.