The Research Of Relevance Of Public Companies’ Agency Costs And Audit Opinions

In recent years, domestic and foreign securities markets which have emerged in manylisted companies fraud scandal, a part of the excellent reputation domestic and abroad havecaught because of the accounting firm audit failures, collusion, etc. These events seriouslyimpact the confidence of investors. How to improve the proportion of the true and fair auditopinions among these auditor’s audit opinions and pick up the confidence of investors isalready becoming a serious problem. The agency problem is rooted in the asymmetricinformation between clients and agents. Compared with the client, the agents have morecomprehensive information, and have obvious advantages. The clients and agent are allselfish and they will pursue the maximization of their own interests. The existence ofasymmetric information will lead to moral hazard and adverse selection at this time, anddamage the interests of the client. Will the agency costs in principal-agent influence theaudit’s opinions? Will the relationship between them be able to reduce agency costs or toprovide some constructive suggestions for improving the audit quality. In this paper, theauthor will take this side, and do the study by using the methods of normative and empiricalresearch on the relationship between the agency costs and audit opinions.The author used the normative analysis and empirical research methods in this article,selecting the2012sample data of listed companies, by using the SPSS16.0software. Firstly,in the introduction section, the author analyzes the background and significance of theresearch, with reviewing research of audit opinions and agency costs domestic and abroad,based on the proposed objectives of this study, content, methods and analyzes the innovationand shortcomings of this article; describes the agency costs audit opinion and other relatedtheories, and then the author made this study hypothesis and select the sample, select anddesign models take to do empirical research related to analysis, the article selectedmanagement expense ratio, total asset turnover, net profit margin and total assets Return onnet assets rate as a proxy for the cost of the description of the variables, and in order toensure the correctness of the findings, selected the company’s growth, capital structure,company size, ownership concentration and industry five indicators as control variables.By using analysis of results and Logistic regression analysis method,the author concluded the four descriptive variables of company ’s agency costs showed a significantcorrelation with the audit opinion, the management fee rate was negatively correlated withthe audit opinion, the other three variables showed a positive correlation with the auditopinion，this study is consistent with the hypothesis of the article.The author concluded: agency costs and audit opinions were positively correlated, inother words the higher the agency costs is, the companies are more likely to be given thenon-standard audit opinions; the company received a non-standard audit opinion during lasttime, the company’s agency costs will be significantly reduced on the next time. Finally,according to the study，the author concluded four advices:improve the supervision andencouragement of listed companies，improve the CPA’s professional knowledge and skills andthe degree of self-discipline, strengthen the CSRC’s system,improve governance structure ofthe companies.