Regulatory Uncertainty And Audit Opinion

In recent years,major financial crises have frequently occurred in listed companies,resulting in losses to investors.In order to protect their own interests,investors rely more on external audit and market supervision when investigating the invested units.With the continuous development and improvement of China’s economic system,government agencies’ market supervision is also more perfect.As the main leading department of government supervision,the CSRC has a decisive impact on market supervision,and the chairman of the CSRC,as the mainstay within the CSRC,will directly affect the capital market.Many scholars at home and abroad have studied the impact of environmental uncertainty on the business behavior of micro enterprises.As an important part of the external business environment,the regulatory environment also has a significant impact on the business behavior of micro enterprises.At the same time,the CSRC’s supervision is not only for enterprises,but also for other participants in the capital market,including accounting firms.Based on the information asymmetry theory and audit insurance hypothesis,this paper studies the relationship between the uncertainty of supervision and the type of audit opinion,as well as the regulatory effect of the nature of property rights and the degree of earnings management on them.The study found that:(1)when the regulatory uncertainty is high,certified public accountants tend to issue non-standard unqualified audit opinions;(2)Compared with state-owned enterprises,when the regulatory uncertainty is high,non-state-owned enterprises are more likely to be issued with nonstandard unqualified audit opinions by certified public accountants;(3)Compared with enterprises with low degree of earnings management,in the case of high regulatory uncertainty,certified public accountants are more likely to issue non-standard unqualified audit opinions for enterprises with high degree of earnings management.This paper also further studies the impact of earnings management direction and regulatory distance on the relationship between regulatory uncertainty and audit opinion types.In order to the robustness of the empirical results,this paper obtains the same conclusion after replacing the classification of audit opinion types and the placebo test.Based on theoretical analysis and empirical research,this paper puts forward relevant policy suggestions from two aspects of enterprise internal management and external supervision,and points out the shortcomings of this research and the contents that need further research in the future.