The Research On The Audit Opinion Shopping Of Listed Company In China

Audit opinion, which is issued by the accounting firm, is an important basis for theusers and authorities to judge and detect the truth of companies, it affects investors’judgment, company’s share price and financing capacity. So, Listed Companies will try toavoid non-standard audit opinion. The behavior of audit opinion shopping occursfrequently in recent years. The behavior not only breaks the independence of auditors,reduces audit quality, leads audit failures, but also misleads investors’ behavior, reduces theeffect of capital market resources configuration, significantly weakens audit control andfunction, affects the audit role that played in capital markets. Therefore, the audit opinionshopping of Listed Companies becomes an important issue in theoretical and practical.This article includes four parts: part one is recalling the related literature at home andabroad, and learning from the studies of other scholars in order to analyze the situation ofaudit opinion shopping. The second part is theory, it introduces each kind of audit opinionsand the impact of modified opinion on capital market firstly; Then defines audit opinionshopping through theory and case; At the last, it explains demand and supply and couplingmechanism in chapter of analysis on audit opinion shopping, it supplies theory bedding forthis article. The third part tests motivations and possible measures of audit opinionshopping through regression analysis, study finds that the motivations of Chinese ListedCompanies more generally come from maintaining company’s image and debt covenants,followed is management compensation; Both changing accounting firms and increasingaudit fees are the ways of opinion shopping. The fourth part tests the effect of these waysthrough ordinal regression analysis, it finds that increasing audit fees is a more effectiveway than changing accounting firms. Finally based on the conclusions, this article givessome relative advices about regulating changing the accounting firm and increasing auditfees.