Research On The Interactions Among Earnings Management Attributes And Audit Opinion And Audit Fees

As a means taken by senior executives to regulate the company surplus, earnings management has been a research hotspot within the management discipline for recent decades. Other than opportunistic motives, overseas scholars have found that many cases of earnings managements are driven by non-opportunistic motives, such as effective contract and information transfer. Because different motives give rise to different economic consequences, it’s not rigorous to lump all kinds of motives together as one in empirical analysis. However, most domestic studies have not differentiated the attributes of earnings management. To fill the gap, this thesis discusses the multiple relationships among earnings management, audit opinion and audit fee from the heterogeneity viewpoint.This research selects a-share listed companies in stock markets of Shanghai and Shenzhen from 2010 to 2014 as empirical sample. Based on th e theoretical framework of accrual earnings management, this paper screens the companies with obvious opportunism and tells whether the heterogeneity has a significant guiding role to the audit opinion and audit fee judging by earnings management attribute variable. On the above basis, further analysis is done for the relationship between opportunistic earnings management and audit opinion with audit fee as a moderator.The results show that earnings management has no certain correlation with audit opinion, and different attributes will have different impact s on audit opinion. This research also confirms the existence of ―opinion shopping‖ and its influence can be expressed in this specific way: opportunistic motives certainly give rise to the non-standard audit opinions, but this relationship is weakened under higher audit fees. Besides, earnings management driven by opportunism can cause higher audit fee.