CPA Firm Change, Executive Turnoverand And Modified Audit Opinions

Former chairman of the SEC’s(US Securities and Exchange Commission)Arthur Levitt had a fitting "watchdog" as a metaphor for external audit. Therefore, external audit can play its due role well and ensure their independence has been the focus of attention. With the increasing development of China’s capital market, the external audit in improving the quality of accounting information, safeguarding the interests of investors, constraints of internal control and corporate governance has played an increasingly irreplaceable role, and this effect achieved through the audit opinion accurately expressed and transmitted. Audit Opinions at this stage, especially the modified audit opinions are increasingly becoming the focus of discussion, The audit opinion is the identification information which given by "third person" independent of the listed companies and stakeholders. On the one hand it shows the effectiveness of external oversight mechanisms, on the other hand has also become an important basis for company stakeholders, especially investors in the capital market make decisions. And with respect to the more mature western capital markets, China’s listed companies to change accounting firms behavior is very frequent, accounting for more than at least twice the upper limit of the mature markets of the West, can not help but worry about the independence of the current audit.Now the deprecation of senior management has been not just an integral part of corporate governance, also it is the internal and external co-stimulation results. Executives change is most extreme model of investors supervising managers, which also is one of standards to weigh the efficiency of corporate governance mechanisms. Replace unhelpful executives timely, instead of a new manager who has strong leadership skills and more suited to the company’s development, so as to bring life to the enterprise. In recent years, along with the rapid development of the securities market, listed company executives deprecated event after another. So what audit opinion in which to play what kind of role, whether inextricably associated with the modified audit opinions in the back of the audit institution and executives frequent replacement. In this paper, modified audit opinion as a starting point In this paper, modified audit opinion as a starting point, select listed company in 2012 were issued mo audit opinion as a sample, and 2013 operating data, shareholder data, firms and other characteristic data of these listed companies for the study.To obtain the standard audit opinions of the company as a paired samples. By multivariate Logistic model, Empirical Research on the relationships of executives, accounting institution changes and other listed company data. We found that modified audit opinions influential but not decisive, Indicators related to the vital interests of the shareholders, such as asset-liability ratio is the determining factor in dec is ion-making, not our usual understanding of business indicators. This paper also found that the modified audit opinions of listed companies to improve the situation and senior management, external audit disclosure of information is not optimistic, still need to strengthen supervision in this area. We are hoping to provide a theoretical basis and reasonable proposals to improve the effectiveness of corporate governance and rational decision-making through this study.