The Relevance Between Finnacialcondition And Corporate Governance To Audit Opinion

The type of audit report of the list company is highly regarded by all kinds of outsiders, and may have very important effects on their decision behaviors. Therefore it has strong theoretical and empirical implications to predict the type of audit report of the list company by some appropriate ways. The aim of this article is that we want to know if the financial condition and corporate governance have important effects on the different audit opinion.Based on reviewing relevant literatures we know that some indicator is related to audit opinion. At first this article will test whether there is some difference exist b etween the eight financial indicator of the standard qualified companies and the standard unqualified companies, choosing logistic model, then this paper defines the financial variables that reflecting the financial conditions of the list company as the independent invariables, then chooses the variable reflecting whether a list company has received the standard unqualified opinion about its financial report as the dependent invariable. The results of the paper reveal that firm size,growth rate on net assets,asset turnover ration,current ratio,basic income per stock,net asset value per share are significantly and negatively related to audit opinion, while price per book value is insignificant, and the debt-to-asset ratio is significantly and positively related to audit opinion.Second, based on evaluation report's results of audit opinion of Shen-Zhen and Shang-Hai Stock Exchange the 2008 and chosen financial condition as control variables, this paper research audit opinion in ownership structure and board feature. Meanwhile, we regress logistic model and analyze the factors for corporate governance effecting audit opinion. The results of the paper reveal that the stock ratio of the largest shareholders, ultimate ownership nature,scale of the board of directors are significantly and positively related to audit opinion; the proportion of independent directors to total number of directors on the board size, board of directors meeting frequency,the average age of chairman, supervisor and executives are insignificant. The total stake form the second shareholder to the forth shareholder and established auditor board is significantly and negatively related to audit opinion.At last, according to the empirical evidences, this paper suggestion.