Internal Control Quality,Pending Litigation And Audit Opinion

In the capital market,the audit report has been delivering important information to users of financial statements,and has played an important role in alleviating the information asymmetry between stakeholders such as enterprises and outside investors.Non-standard audit opinions have received special attention.Because non-standard audit opinions often transmit negative signals such as uncertainties in the continuing operations of listed companies,research on the factors affecting audit opinions has always been an important issue in related fields.Based on the role of internal control in improving the reliability of financial reporting information and reducing the audit risk,this article examines how internal control quality affects the audit opinion.In addition,companies involved in lawsuits involving various disputes are involved in lawsuits.The lawsuit has not yet been judged at the end of the year and has resulted in the pending lawsuits of listed companies.The existence of unsuccessful lawsuits may affect the ability of a company to continue its operations.CPAs need to use professional judgments to make audit judgments and face higher auditing risks.Based on the uncertainty of pending lawsuits,this paper also studies pending lawsuits.Relationship with audit opinion.Finally,this article introduces the item of the pending lawsuit and the quality of internal control,and examines the interaction between the two.This article selects A-share listed companies from 2010 to 2016 as samples,and conducts empirical tests based on principal-agent theory,signal transmission theory and insurance theory.The results found:(1)High-quality internal control plays a positive role in the CPA issuing standard audit opinions.The higher the internal control quality of a listed company,the less likely it is to receive non-standard audit opinions.(2)The pending lawsuit will also have an impact on the audit opinion.Listed companies with pending lawsuits are more likely to receive non-standard types of audit opinions.(3)After adding the unfinished litigation and the quality of internal control,it was discovered that the existence of the pending lawsuit changed the relationship between the quality of internal control and the audit opinion,that is,the pending lawsuit weakened the high quality internal control standard audit opinion.The positive effect.The study of this article not only has theoretical value,but also plays a guiding role in practice.On the one hand,this article studies the relationship between internal control quality,pending litigation and audit opinions,can enrich the research on the quality of internal control and the economic consequences of pending lawsuits,expand the research on the factors that influence the formation of audit opinions,and provide information for exploring the relationship between the three.Certain empirical evidence.On the other hand,the different impacts of internal control quality and outstanding lawsuits on audit opinions can guide listed companies to increase the probability of receiving standard audit opinions by strengthening the construction of internal control and the management of pending litigation,and can also make the CPA clearly When auditing,it should pay more attention to unresolved lawsuits and other uncertainties,reduce the impact of pending lawsuits on audit risks,and issue more trustworthy audit opinions.