An Empirical Research On The Relationship Between Financial Statement Fraud, Audit Fees And Audit Opinion

one of the characteristics of Modern enterprise system is the separation of ownershipand management, because of this, it forms the principal-agent relationship and furtherresults in the asymmetry of information between the owner and operator of company.Therefore, when the management face the pressure of stock allotment, be special treatedor suspended will have the strong motivation of financial statement fraud. However, inorder to make their frauds smoothly through the auditor’s audit, the management is likelyto pay extra audit fees to auditors for the audit opinions purchasing. It is not difficult tofind that, in recent years, the cases of audit failure occurred frequently, from the event of“An Ran” to the “Yin Guang Xia’s” financial fraud case, all of these had seriouslydamaged the healthy and orderly development of the capital market.And in many cases,auditors as "the police of economic " didn’t play the responsibility of check wrong, butconspiring with the audited units to provide the favorable audit opinion report forpersonal interests. This makes the independence of the auditor as a third party wassuspected, and the development of the auditor market also faced a serious challenge.Therefore, identifying the company’s financial statement fraud risk, regulating the auditfee’s standard and prevent the purchase of audit opinion will have a great significance toauditors, the companies and the investors.This dissertation based on the literature review, using the risk-oriented audit theory,financial fraud motivation theory, the economic man supposition theory, theprincipal-agent theory, information asymmetry theory, internal control theory and thetheory of supply and demand and so on to analyze the relationship among financialstatement fraud,auditing fee and the auditing opinion purchasing, then selects the listedcompanies which were punished by the CSRC in2004-2008as the samples of auditfailure, constructing the prediction model that is used to measure the listed company’sfinancial fraud risk, and then testing the relationship between company’s financialstatements fraud, the audit fee and the audit opinion. The results of empirical study showsthat: under the risk-oriented audit mode the existence of financial statements fraud’s riskincreases audit fees; there has no significant between relevant relations between abnormalaudit fees and the audit opinions, shows that through the level of abnormal audit fees can’tdirectly judge whether a listed company has the behavior of the audit opinions shopping;however the interactive variable of fraud risk and abnormal fees has the positive correlation with the standard audit opinions, but it is not significantly. In some degree,italso instructions that the listed companies are likely to purchase audit opinions when thesupply and demand combine with each other. Finally improvements are suggested onempirical findings.