An Empirical Study On The Impact Of Non - Standard Internal Control Audit Opinion On Stock Price

Along with the promulgation and implementation of the "Supporting Guidelines for Corporate Internal Control" in China in 2010, Chinese listed companies have gradually established and improved an internal control system. Corporate focus on internal control has reached an unprecedented height, which can be directly reflected by the quantity of internal control auditing opinions disclosed by listed companies. In 2012, only 229 main board listed companies disclosed internal control auditing opinions. However, in 2015, the corresponding figure was up to 1,498, of which 19 copies gave negative opinions. Although the quantity of internal control auditing opinions has risen significantly, whether internal control auditing opinions attract great attention from investors and whether the disclosure of non-standard internal control auditing opinions would produce a negative impact on the stock price still require in-depth research.In this paper, firstly, studies of foreign and domestic scholars on the relationship between financial report auditing opinions and the stock price are reviewed to get research ideas into shape. Secondly, types of internal control auditing opinions are introduced, and the theory of "efficient market hypothesis" is used to examine the impact of non-standard internal control auditing opinions on the stock price and find that non-standard internal control auditing may have a negative impact on the stock price. Thirdly, the event study and multiple regression analysis are adopted to check whether non-standard internal control auditing opinions disclosed by Chinese listed companies affect the stock price. Non-standard internal control auditing opinions of listed companies appearing on the A-share main board from 2011 to 2014 are taken as research samples, to analyze the variation law of the average excess return and cumulative excess return of their stocks 15 trading days before and after the disclosure of non-standard internal control auditing opinions, and conclude that in a short time after the disclosure of non-standard internal control auditing opinions, non-standard internal control auditing opinions do not produce a negative impact on the stock price. Lastly, on the basis of research findings, recommendations are put forward for enhancing investors’awareness of non-standard internal control auditing opinions from the perspective of regulators and investors.