Study On The Motivation Of Voluntary Audit Of Interim Financial Reports

The business community, such as potential investors, creditors, management and shareholders want to make a deal, and external audit services can facilitate it. Inevitably, enterprises will have requirements of audit services. So it forms an independent audit market. The demand side’s operation of main audit market players (supply side and demand side) have a direct impact on the quality of independent audit and the market. In China, increasingly improving capital market and more and more complex market environment make auditing more important taking the blame of social supervision and certification responsibility.In the case of compulsory audit of interim financial report, some listed companies choose to voluntary audit interim financial report. So listed companies do this for the audit motivation or audit quality.In this paper, we make voluntary audit of interim financial reports as unique perspective. Based on the principal-agent theory, signaling hypothesis, information hypothesis, insurance hypothesis and combined with the background of China’s audit system, it analyzes the motivation of voluntary audit interim financial reports of listed companies using the normative and empirical research and literature research. The article is divided into five parts. The first part introduces the background and significance of voluntary audit of interim financial reports, substantially describes basic research content and research methods, innovations. The second section describes the basic theory of this article with the actual situation in China to match, states which theory should be based on. The third part introduces the study design, selecting research variables and models according to the theory of this paper. The fourth part makes the logistic regression according the the model and robustness tests, finally make the results. The fifth part presents corresponding countermeasures and suggetions based on empirical findings and explains future research directions. The results show that:asset-liability ratio, corporate growth and voluntary audit of the interim financial report is significant positive correlation at the 1% level. Asset-liability ratio is higher, the willingness to engage in voluntary audit of interim financial report. The corporate growth, the better, the more inclined to accept voluntary interim financial report audit. ROE and voluntary audit of interim financial report is significant positive correlation at the 10% level. The better the performance of the company, the more willing to volunteer to be audited. Company size and voluntary audit of interim financial reports was significantly negatively correlated at the 1% level. The larger the company, the weaker to receive voluntary audit of interim financial reporting. Empirical results is compatible with the principal-agent theory and signaling hypothesis. Voluntary audit requirements are not necessarily demand for high quality audit services.Voluntary interim financial report audit or not is not the real reason impacting of audit quality.Deeper reason should be the motivation for the audit of listed companies.