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The financial situation of enterprises and audit quality

Author: HuXiaoRong
Tutor: ZhangXiaoYou
School: Southwestern University
Course: Accounting
Keywords: Financial position Financial Indicators Audit quality Over - ROI Investment decisions
CLC: F239.4
Type: Master's thesis
Year: 2010
Downloads: 494
Quote: 1
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Abstract


China's audit market through long-term development, has been increasingly improved. As Accounting Information Assurance, the audit opinion of Certified Public Accountants growing public concern. For many users of financial statements, they usually do not participate in the operation and management of enterprises, in addition to their own limited expertise in identification of quality of accounting information and the need for high cost, then they how to determine the level of corporate disclosure quality of financial information ? CPA as an independent third party, the audit opinion on the financial statements naturally on the investment decisions of investors plays an important role. It can be said that the CPA audit quality affect all aspects of the interests of the users of accounting information that affects the healthy development of the securities market, affecting investment decisions of the majority of investors. Good corporate finance, there is no motive of fraud, it will not whitewash its financial statements, in this case, the CPA audit quality naturally high. However, when the case of the enterprise's financial situation is bad management due to various reasons want to whitewash on the financial position, the motivation to buy audit opinion, in this case, the Certified Public Accountant found corrupt conduct and disclosure of audit quality is high. But the current market is not the case, due to the existence of unfair competition, accounting firms often for fear of losing customers to the enterprise management authorities to compromise, resulting in certified public accountant with the customer relationship is distorted, certified public accountants may not fully or completely failed to comply with the Independent Auditing Standards that it can not find that a material misstatement or omission, may also be found material misstatement will not be disclosed, even selfish, and regulatory authorities conspiracy, fraud audit report is issued. Well, in this current market environment, how to judge whether the corporate disclosure of financial information is reliable? How to determine the level of quality of the CPA audit? Based on the above problem, first of all, on the financial situation of enterprises evaluation and audit quality measure The standard theoretical analysis. Then, make sure the 372 manufacturing Shenzhen and Shanghai A-share listed companies as samples, and the use of the correlation coefficient method to filter out the operating margin, net profit margin of the total assets, inventory turnover, fixed asset turnover, liquidity ratio, debt ratio, the rate of capital accumulation, the growth rate of total assets, net assets per share and earnings per share of 10 financial indicators as explanatory variables, in order regression model has better effect, also selected a listing of the number of years of audit opinion type of audit tenure and accounting firms scale four control variables. Finally, the multicollinearity test of all the independent variables, found the fixed asset turnover, inventory turnover, current ratio and debt ratio, earnings per share and net assets per share between the independence of the poor, so its \of type of audit opinion, audit tenure and accounting firms scale control variable linear regression model for empirical analysis. After the analysis, draw the following conclusions: (1) the financial situation of enterprises and audit quality are highly correlated, but certain financial measures did not pass the t-test, which may be due to the selection of indicators of financial data occasional volatility, sample choice and other non-financial information impact. (2) on the type of audit opinion regression coefficient is significantly positive for listed companies, investors issued a modified audit opinions for over a higher rate of return on investment, investors believe that the higher audit quality. Finally, describes the limitations of this study with the idea of ??further study.

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CLC: > Economic > Economic planning and management > Audit > Various types of audit
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