Process Of Marketalization, Financial Fraud And Audit Opinion

With stock market marching forward, the events of financial fraud come up again and again. For instance, there were enron event and worldcom event in foreign countries. Also, it occurred wanfu biotechnology event and yinguangxia event in China. Financial fraud behaviors injure investors’ interest and hinder the development of capital market. In the meantime, people doubt whether certified public accountants are auditing independently. Audit industry faces stern reality. Certified public accountants are executors in auditing financial statements in listed companies independently, separating from stock market. They need to give audit opinions when they audit financial statements in public companies. Due to the fact that auditors are the main body of market economy, they may provide false audit opinions for economic benefit, and stakeholders will make wrong decisions. The type of audit opinions is an important criterion to fraud behaviors to some extent. The occurrence of financial fraud may also be associated with non-standard audit opinions. In the course of auditing, certified public accountants may issue unqualified opinions with notes, qualified opinions and qualified opinions with notes for their own interest and to avoid the risk. From the perspective of governance environment, regions with higher marketization degree have management standards and can supervise enterprises. Consequently, audit quality in these areas is much higher. On the contrary, audit quality is relatively poor in regions with lower marketization degree. It happens fraud behaviors in enterprises more easily.The paper analyzes financial fraud in theory by using principal-agent theory, financial fraud motivation theory and information asymmetry theory, and it mainly analyzes audit opinions in theory by using game theory, insurance theory and agency theory on the basis of domestic and foreign literature. Then it proposes hypotheses according to relevant theories. The paper selects Shanghai and Shenzhen A shares of listed companies from 2009 to 2013 as research samples, and uses Logistic regression model to make an empirical analysis of financial fraud and audit opinion. The empirical result shows that listed companies with the occurrence of financial fraud are more likely to be issued non-standard unqualified audit opinions and be published unqualified opinions with notes, qualified opinions and qualified opinions with notes. In addition, under the environment of lower marketization degree, the influence of financial fraud on non-standard audit opinions is much more obvious. In addition, ST liquidity ratio, current ratio, quick ratio, asset liability ratio, total assets turnover rate is significantly related to audit opinions. At the end, the paper makes suggestions according to the empirical analysis.