Performance Forecast Correction Range And Audit Fees

The performance forecast disclosed by the management of listed companies is a kind of profit forecast information that can effectively alleviate the problem of information asymmetry between management and the investors,and it also has an important impact on investors'investment decisions and analysts'subsequent analysis.The amendment announcement of the performance forecast is a"correction"announcement accompanied by the performance forecast,and the information it contains also has a significant effect on the investors' behavior and the analysts'decisions.In recent years,many listed companies have used the provisions of the performance forecast amendment to substantially correct the profit forecast information previously disclosed.The phenomenon that listed companies have significantly revised their performance forecasts not only caused the volatility of the stock market,but also caused concern of the regulatory authorities.In September 2017,Shenzhen Stock Exchange issued a document stating that it would focus on companies that had significantly revised their performance forecasts,and the CICPA also reminded the accounting firm to pay attention to the audit risk of the listed company's annual report that had a history of repeatedly revising the performance forecast.So it can be seen that the revised announcement of the performance forecast may be more than a simple"corrective" information,but is more likely to be a signal of the risk of unstable operation of the company and material misstatement of the financial statements.Based on the performance forecast information disclosed by Chinese listed companies in 2013-2017,this paper makes a study on whether the amendments to the preliminary performance forecast of listed companies will affect the current audit fees and the adjustment effect of auditor changes on the relationship between the two.The results of the study show that the higher the revision of the previous performance forecast,the higher the audit fee for the current period,and the auditor's change can positively adjust the positive correlation between the two.Further research has also found that the above research relationship is more significant in the sample of companies whose performance forecasts have been corrected to bad news.In addition,after replacing the research variables with the audit opinions,the results show that the correction range of the previous performance forecast is significantly positively correlated with the possibility of obtaining the auditor's non-standard audit opinion in the current period,and the auditor's change can negatively adjust the positive relationship,which indicates that the audit opinion purchase behavior of the listed companies has incurred.The conclusions of this paper indicate that the revision of the performance forecast can be used as one of the indicators to reveal the risk of material misstatement of the financial statements of listed companies and it can also provide important guidance for auditors to conduct audit risk assessment and investors to make investment decisions.