The Response Of Auditor Opinion To Accounting Fraud And Its Influencing Factors

The financial reporting audit is CPA's legal service. As"the independent third person"who is independ- ent of various benefits counterparts of listed company , CPA publishes the audit opinion in view of the quality of financial report information,audit opinion is taken seriously for enterprise's various benefits counterparts, and it has the important influence on their policy-making behavior. However, as the capital market develops rapidly, the fraud of listed companies is rampant day by day.Accounting fraud has not only harmed investor's benefit seriously but also destroyed the healthy development of the capital market. At the same time, accounting fraud has attacked the entire audit field seriously. CPA acted as"economic police"receives the very big question. This paper will research CPA's manner to accounting fraud, as well as which factors influence audit opinion when accountants issue audit opinion in the condition of accounting fraud. This paper will also evaluate the CPA's quality of the practice in the fraud audit and test the effectiveness in the reform of the audit system from the point of view of empiricism.In addition, this research will provide the theory and the practical support for the development of China's audit industry.Referring to the outcome of previous studies, this paper made assumptions of the study through studying the related theories with regard to accounting fraud and audit opinion.This article chosed listed companies committed accounting fraud which were punished publicly by SFC,the Ministry of Finance, the Shenzhen Stock Exchange and the Shanghai Stock Exchange in penalty notice from 2002 to 2007,and researched the correlation between accounting fraud of listed companies and auditors'non-standard unmodified opinion.The results show that CPA can release a non-standard unmodified opinion to the corporate accounting fraud to a certain extent. In addition, we further found that a certified public accountant mainly used modified opinion, adverse opinion and disclaimer of opinion to reveal the corporate accounting fraud. In addition, we also found that the correlation between modified audit opinion and accounting fraud is much notable along with the time flying. It showed that due to the increase of the accountant's professional making and risk consciousness as well as the perfect of our country's rules and policies, the whole accountants'level and audit quality have been gradually improved. On this condition, the paper explored further what were influencing factors when accountants issue audit opinion in the condition of accounting fraud. It is concluded that there is notable relation between audit opinion and some financial index,such as debt ratio, the previous year's audit opinion, non-core return ratio, the ratio of net operating cash flow to liabilities and asset turnover ratio.In addition, fraud audit quality of "ten big" accounting firms was superior to that of the "non-ten big " accounting firms. Customer size and non-standard audit opinions were positively correlated, but the result is not marked. At last, we put forward the related audit advices.