A Study On The Relativity Between Earnings Management And Auditing Opinions Of Chinese Listed Companies

The earnings management of listed companies and CPA’s audit quality has always been a focus on the securities market. In recent years, the sum involved of a series of accounting fraud are staggering, and has made a tremendous impact. As an important part of the external supervision,CPA has also been implicated and criticism. Due to earnings management result is reflected in financial reporting, Effective external audit should be able to oversight of earnings management by publishing different audit opinion. As a ruslut, the relationship between auditing opinion and earnings management of listed companies, and propose appropriate countermeasures and management advice, which is an important subject is worth studying.This paper combines normative research and empirical analysis. In normative research, according to the relationship between earnings management and audit opinions to explain related theories of he meaning of earning management, property, property, motivation, and audit opinions. On the basis of Chinese capital market to analyze the situation of Chinese listed companies earnings management behavior at present. In Empirical research, picks out 1276 Main Board listed company’s data from 2009-2013 AB shares in Shanghai and Shenzhen Stock Exchange. The audit opinion as the dependent variable, earnings management as the independent variable, and introduces seven control variables:company size, ROE, asset-liability ratio, asset turnover, the type of audit opinion previous year, whether to replace the accounting firm, whether it is the four major international accounting firm, use the descriptive statistics and orderly logistic regression method, on the one hand, analyses the correlation between earnings management and audit opinions, on the other hand, analyses the main factors that may affect the audit opinion. The results show that:There is the significant positive correlation between earnings management of listed companies and audit opinion. Listed companies’ earnings management behavior can be found in the auditor during the audit process.The probability of the auditor to find different properties and different direction of earnings management is different. The probability of the auditor to issue a non-standard opinions of opportunistic earnings management is higher than decision-making useful earnings management. In opportunistic earnings management, compared with negative earnings management, positive earnings management can be found by the auditors more easily, that is to say, the auditor found that positive earnings management more easily.The main factor that impacts the CPA audit opinion is the listed company’s size, profitability and financial condition, whether to replace the accounting firm and the size of accounting firm have no significant effect on the audit opinion issued.Finally, the paper figures out that we should strengthen the supervision of CPA industry deepen the reform of property rights of listed companies, strengthen the build of the system of listed companies’internal control, in order to further improve the level of Chinese certified public accountants audit to better reflect the earnings management behavior of listed companies.