An Empirical Study About How Environmental Information Disclosure Affect CPA Audit

In recent years, with the increasingly serious environmental pollution problems such as haze, the state issued a series of environmental regulations. At the same time, With the increasing awareness of environmental protection, enterprises are increasingly concerned about environmental information. If the company pollutes the environment, it may not only be required to pay a huge amount of compensation, the worst case would affect the company’s continuing operations, thereby affecting the decisions of investors and creditors. Now corporate environmental situation closely to their survival and development. It can be said that environmental information can produce a large enough economic impact on businesses. For heavily polluting enterprises, especially listed companies, the environment cause a greater impact on them. In view of the importance of environmental information for such enterprises, environmental information may have an enormous current and potential impact on the financial statements, the CPA in the audit need to be considered to provide reasonable assurance of the fairness of the financial statements information. When the CPA audit these companies, they need consider the environmental information of the audited entity, devote more time and effort, which may affect the audit fees. On the other hand, the CPA audit in order to avoid the risk, usually more cautiously public audit opinion.After describes the background of this article, the article first analyzes the environmental information disclosure and audit responsibilities CPA research literatures, which is used as the theoretical basis of this paper. Then elaborated the institutional background about environmental disclosure and environmental audit and further use fiduciary agent theory, audit risk theory, citing deep pocket theory tell use the reason why CPA need to focus on environmental information. Then through the audit risk model, we reveals the environmental information disclosure impact on the CPA audit, and choose audit fees and audit opinions as explanatory variables, namely establish its links with environmental information disclosure level for empirical analysis. Taking the 2012, 2013 Shanghai A-share listed companies in heavily polluting industries for the study, taking the environmental information disclosure index as a proxy for the degree of disclosure of environmental information, using the degree of Logistic model and multiple linear regression model,this paper analyzes how environmental information disclosure impact audit fees and audit opinion. The results show that: the degree of heavy polluting industries environmental information disclosure of listed companies positively correlated with audit fees, and positively correlated with standard audit opinion. That is,the more detailed environmental information disclosure of the audited entity, the more invested CPA audit resources, audit fees is higher. While the smaller potential risks need to be considered, CPA more inclined to public standard audit opinion. Based on the findings of this article, the author concludes some recommendations through internal company,country and accounting firm.