Study On The Influencing Factors Of Listed Companies Audit Opinion Under Modern Risk Oriented Audit Mode

Modern risk oriented audit is new auditing method，which is produced accompaniedby the audit business environment changes at the end of the twentieth century. In1997, thepioneer of modern risk oriented audit---the United States of America KPMG andassurance research center director Dr.Timothy B.Bell and University of IllinoisUrbana-Champaign published a research report 《strategic system audit conceptorganizations》, put forward the KPMG BMP (Business Measurement Process) audit mode,construct of a strategic analysis (Strategic Analysis), process analysis (Process Analysis),management evaluation (Business Measurement), risk assessment (Risk Analysis) as wellas continuous improvement (Continuous Improvement) risk audit process.Risk oriented audit refers to analyze and judge the risks and risk degree of the auditedunits, make the audit resources focus on high risk audit field, take audit strategiesaccording to different risk factor status and degree, strengthen substantive test to the highrisks, and reduce residual risk of internal audit to the lowest level based on auditors fullyunderstand and evaluate internal control of the audited units. Different with traditional riskoriented audit model, modern risk-oriented audit is a new auditing method, it is newdevelopment of strategic management theory system theory in the promotion of auditmethod in auditing practice. Risk oriented audit overcomes the defect of transaction-basedauditing and system-based audit, makes Certified Public Accountants can publish overallfinancial statements audit opinions more fairly.When Certified Public Accountants publish audit opinion, need to consider theinternal and external environment of the audited units. That is the influence factors of auditopinion, thus reduce the audit risk to the lowest level. This paper aims to study listedcompanies audit opinion influence factors under the modern risk oriented audit mode,expect to provide suggestions to audit practice.The paper adopts normative research and empirical research combined method,selects the East China A shares listed companies data, with the audit motives and modern risk oriented auditing development as the starting point to put forward hypothesis,discusses the governance structure of listed companies, financial risk, profitability, firmsizes and whether change accounting firm and other factors on the effect of CertifiedPublic Accountants audit opinion.This paper is divided into six parts:Part1: Introduction. Firstly, introduces the research background and researchsignificance of the paper, then summaries the current domestic and foreign similar researchand describes the research thoughts and research methods.Part2: The production and development of modern risk oriented audit. Starting fromthe economic reasons of audit motives, analyze the background of modern risk orientedaudit: the exist of auditing expectation gap and the change of audit target(social factor);audit organization’s economic pressure (the foundation); the internal defects ofsystem-based audit (technology factor); the development of strategic management theory(ideas factor). The paper elaborates the concrete process of risk oriented audit, introducesthe development process of risk oriented audit model in China. At present, people hold twodifferent points of view to the main content of this audit mode: the view of in order tomanage the risk analysis as the main content and the view of in order to find out themanagement fraud as the main content.Part3: Theoretical analysis and research hypothesis. The main content of this part isto put forward the research hypothesis.(1)Analyze the relationship between listedcompany governance structure and audit opinion, including ownership structure, system ofindependent directors and audit committee system, then put forward the first hypothesis:The perfect listed company governance structure can reduce the possibility of being issuednon-standard audit opinions by auditors;(2)Analyze the relationship between accountingfirm size and audit opinion, put forward the second hypothesis: compared to small firms,auditors in small firms are more possible to issue non-standard audit opinions;(3)Analyzethe relationship between accounting firms changes and audit opinion, put forward the thirdhypothesis: When listed companies exist firm change phenomenon, Certified PublicAccountant are less likely to issue non-standard audit opinions.(4)Analyze the relationshipbetween listed company financial risk and audit opinion, put forward the fourth hypothesis: The higher of the legal risk, and the more possible to be issued non-standard auditopinions.Part4: Empirical research design. Introduces the sample data of empirical researchrequired, variable index and research methods. This article selects East China six provincesand one city’s A shares listed companies data in2009and2010years. By using the methodof combing descriptive statistical analysis, correlation analysis and regression analysismethods to validate the proposed hypothesis.Part5: Empirical analysis. Firstly, analyzes the differences in all variables betweenstandard audit opinion group and non-standard audit opinion group by using descriptivestatistical analysis methods, preliminary validates partial hypothesis in this article. Andthen makes correlation analysis to the equity structure of listed companies and the financialrisk’s effect on audit opinions, draw the consistent conclusion with the hypothesis. Lastly,through logistic regression, draw the following conclusions: the governance structure oflisted companies is more perfect, it is more difficult to be issued non-standard auditopinions; there are no significant relationship between firm size and audit opinion; firmchanges can not significantly improve audit opinion of listed companies; the higher riskand the lower profit ability, then the greater probability being issued non-standard auditopinions.Part6: Countermeasures and study limitations. The article makes the followingrecommendations according to the analysis conclusion,: Perfect the governance structureof listed companies, we should continue to promote the share-trading reform, soundindependent directors and audit committee system; control the listed company guaranteerisk strictly, and reduce financial risk; increase the application of risk oriented audit modelin China; perfect the related laws and regulations system construction.The innovation of this paper lies in:(1)In research methods, firstly, the paper makes a system summary to the factorsinfluencing listed companies audit in the normative aspects. Secondly, makes empiricalstudy by using the method of correlation analysis and regression analysis combined.(2)On index selection, the paper joins the related guarantee transaction as theindependent variables reflecting the listed company legal risk to the regression model, and obtains expected conclusion, so provides a reference for Certified Public Accountant tofocus on related transactions in the future audit.The limitations of this paper lies in：(1)Firstly, from sample selection, our country started to implement risk oriented auditmodel from2006, but this article only selects the East China’s A share listed companies’2009and2010two years as samples to analyze, this part of the listed company has theadvantage of the resources, the conclusions may be difficult to generalize to all domestic Ashares listed companies, and the conclusion’s persuasion to the audit opinion of listedcompanies of the influence factors in our country since the implementation of therisk-oriented audit may be not strong enough.(2) Secondly，on index selection, there are many reasons which can influence the typeof audit opinion of listed companies, but in view of a certain degree of difficulty of the datasource, this article only selects some representative factors to analyze, and only selects arelated transaction index to reflect listed companies legal risk. The accounting firm scaleindex this paper selects is measured by accounting firm’s total business income ranking inthose days, in the actual ranking, firm size ranking can also be based on the number ofemployees and the number of Certified Public Accountants, therefore, the indicators havecertain one-sidedness.