Risk Warning Information And Auditing Opinion

Under risk-oriented auditing,auditors will not only pay attention to the company's financial and operational quality itself,but also the various risks associated with it.However,previous studies have tended to examine the impact of risk signals reflected by structured financial indicators on audit opinions,such as the impact of high-debt financial information,earnings management behavior,performance fluctuations,etc.,and most of these studies are limited to the scope of structured information in financial reporting,lacking of in-depth research on how large amounts of unstructured information such as risk warning information affect audit opinions at the overall level.At the same time,a large number of studies have confirmed that the external demographic characteristics of senior executives can represent their personal cognitive and psychological preferences to a certain extent,and these characteristics have a significant impact on the quality of information disclosure and the types of audit opinions.The importance of the problem also lies in the fact that China is undergoing tremendous changes in institutional policy currently.Because many legal systems are still in the early stages of development,coupled with the immature regulatory environment,some large firms have the opportunity to take advantage of the differences between the transnational or regional market environment to reduce audit quality.Therefore,the size of the accounting firm itself couldn't guarantee the soundness of audit opinions.Therefore,the primary issues of concern for this article is: does the auditor taken into account the non-financial risk information disclosed in the annual report during the audit process?Does this information reflect the overall risk of the enterprise,and whether there is an echo or some intrinsic relationship between the information and audit opinions? The question that arouses our further consideration is: what role does executive background play in the process of issuing audit opinions? Does different background characteristics of executives have the same effect by acting on risk warning information? Under the special institutional background and market environment of our country,can large-scale firms be more vigilant than small firms when facing the risk information of annual reports,and thus produce more stable audit opinions?Based on the above questions,this article uses text mining technology to analyze and quantify the risk warning information in the annual report,to investigate whether it has an impact on the audit opinion,as well as the regulatory role of the executives' background and the size of the accounting firms.The study found that when the risk warning information disclosed in the annual report increased,the listed companies are more inclined to obtain non-standard audit opinions.According to the grouping of executives' background,the positive effect of risk warning information on non-standard audit opinions was even more significant for female executives with older age,higher academic qualifications,and longerworking hours in a certain period.After further grouping according to the size of the accounting firms,it was found that only larger-scale firms can enhance the positive influence of executives' background and risk warning information on non-standard audit opinions.The results of the study indicated that the risk-oriented audit model has well considered the impact of the annual report risk warning information.Moreover,the personal characteristics of the executives and the external environment of accounting firms contribute to the guarantee of audit quality,which provides empirical evidence for the signing of the audit contract and the choice of the firms.