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China's Cpa Non-standard Unqualified Audit Opinion Analysis

Posted on:2005-12-16Degree:MasterType:Thesis
Country:ChinaCandidate:J F HeFull Text:PDF
GTID:2206360122980708Subject:Accounting
Abstract/Summary:PDF Full Text Request
In October of 1992, China's Securities Regulatory Commission was established, requiring that all the annual reports of listed companies should be audited by CPA. Since then, our CPA's audit has developed more than ten years. Based on these auditing reports, there is a great increase of quantity in modified audit opinions from1993 to 2002. In fact, non-clean opinions are paid more and more attention by supervision departments and vast investors. And I am interested in those companies which CPA provides modified audit opinions. What factors cause these? Whether there are some factors which influence our auditors' independence? That is what the author will discuss in this thesis.Structure of ThesisThis thesis is composed of four parts:The first part: Introduction of the non-standard audit opinionsThe second part: Description analysis of non-standard audit opinions in listed companiesThe third part: Factors which influence the audit opinionsThe forth part: How to regulate the behaviors of listed companies and auditors.The first part: introduction of the non-standard audit opinions. What is non-standard audit opinions reports? The independent audit principle define it as: the non-standard audit opinions reports, it refers to other forms of audit opinions reports except the standard audit opinions reports. It includes withholding opinions, unable to show the opinions , denying opinions and etc. In the independent audit principles, it regulates that in which conditions auditors should provide non-clean opinions. So in this chapter, there is an introduction of these.The second part: description and analysis of non-clean opinions in listed companies. In this chapter, the author apply the methods of statistics combined with case analysis. From the statistics data of non-clean opinions' quantity in listed companies from 1993 to 2002, we can see there is a great increase in the quantity of listed companies which were showed non-clean opinions. especially in 1999, the quantity of the nonstandard opinions reached it's historical highest peak. It proves to some degree that our auditor's independence is improved. But the condition is not very optimistic. From the case analysis, the author finds that there are still some problems in auditor's independence.The third part: factors which influence the audit opinions. In general, there are two aspects influencing auditor opinions. One is the situation of the companies, the other is the auditor's independence. So in this chapter, the author will analyze this from these two aspects.According to the situation of the companies. In many positive research, many scholars regard financial situation of the companies as an important factor influencing the audit opinions. So first, the author will verify their correlativity. On the one hand, I choose the sample of loss listed companies from 1998 to 2002. from the statistic data, the author finds that those companies are apt to be provided non-standard opinions. And on the other hand, I choose the sample of companies which were provided non-standard opinions by auditors in 2002. From analyzing their financial conditions, the author finds that those companies' financial conditions are pessimistic. So, based on the analysis of these two respects, we find that the financial situation of companies has obviously correlativity with the type of audit opinions.But we know there should be no correlativity between financial situations and the type of audit opinions. Then what reasons cause this happen? I try to explain this. The author's hypothesis is that :in order to avoid ST or getting out, those companies whose financial situation is bad have motive to manipulate earnings. And then I collect those companies' financial data. All the data prove that there lies earnings management in those companies. So from these, the author draws the conclusion: for those companies of bad financial situations, there lies behaviors of earnings managemnt, which leads to auditors' providing non-clean opinions.Then wh...
Keywords/Search Tags:audit independence audit opinions earnings management
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