A Study On The Reasons And Consequences Of Frequent Change Of Auditing Organizations In Shandong Geology

With the gradual development of China's securities market,the customer relationship between audit institutions and listed companies has also become closer.In the case where the management right and ownership of a listed company are separated,the investor of the company needs to rely on the internal control and financial audit appraisal report issued by an independent third-party auditing agency to make judgments on the business development of the company.Stable development also depends on the auditing body's adherence to objectivity and independence.However,in recent years,some listed companies have frequently changed their audit institutions due to a variety of complex internal reasons or external factors.According to statistics,the number of enterprises that change the behavior of audit institutions is increasing year by year.Enterprises that frequently change audit institutions will also cause widespread concern in the securities market,which will have a certain degree of impact on their own reputation.In summary,by exploring the reasons for frequent changes in audit institutions and the consequences of frequent changes in audit institutions,it is believed that enterprises should improve internal control governance and profitability to attract investors' favor,rather than change audits.Institutions attempt to purchase good audit opinions;and the purpose of this study is to regulate the frequent changes in the accounting firm behavior of listed companies in the securities market,and give full play to the role of certified public accountants as the "economic police" of the capital market to maintain the healthy and stable development of the capital market.This article selects Shandong Geology and Minerals Co.,Ltd.(ST Geology and Minerals)as the research object of changing audit institutions many times since its backdoor listing.It combines theory with cases and discusses them into six chapters.The first chapter elaborates the background and significance of selecting and researching the change of audit institutions of enterprises,and conducts research on domestic and foreign scholars from three aspects: the relationship between auditors and customers,the reasons for changing audit institutions of enterprises,and the consequences of changing audit institutions of enterprises.Review and summarize,put forward the main research content and direction of this article,and present the logical framework of this article.The second chapter briefly explains the related concepts of change audit institutions and the basic theory of audit relationships.The main theories are audit contract theory,information asymmetry theory,and audit conflict theory.Based on the restructuring of auditor-customer relationships,it analyzes the reasons for changing audit institutions.And consequences.The reasons for changing the audit agency are analyzed fromthree aspects: report drivers,economic drivers,and practical drivers.The consequences of changing audit agencies are mainly analyzed from three aspects: financial status,audit reports,and market response.The third chapter of this article introduces the short-term frequent changes of audit institutions in Shandong Geological Mine as a case to study the motivation and consequences of the company's change of audit institutions.Because Shandong Geological and Mineral Corporation has changed its office behavior five times in recent years and the last four changes occurred Within 14 months,it was considered a typical case.This chapter introduces the basic situation of Shandong Geology and Minerals Co.,Ltd.,the progress of the change of audit institutions and the disclosure of the announcement of the change of audit institutions.The fourth chapter analyzes the frequent changes in the behavior of the Shandong Geological Mine's office from the reasons for the changes in the audit institutions due to the financial situation,audit reports and accounting differences with the audit institutions.Then in Chapter 5,it analyzes that the financial distress of Shandong Geological Mine due to frequent exchanges has not been whitewashed,the disclosure date of the audit report has been delayed,And through the cumulative excess rate of return(CAR)specific analysis of its changes after the negative market response.The sixth chapter of this article is based on the above research and analysis of the change behavior of the audit agency of Shandong Geology and Minerals,and draws relevant conclusions: First,the frequent change of the audit agency reflects the imbalance of corporate governance;second,the frequent change of behavior does not achieve the audit opinion purchase;Frequent corporate changes have caused intense negative market reactions.Then,based on the audit contract relationship between the auditor and the company,relevant recommendations are made: First,starting from the enterprise,the company's governance mechanism should be improved,and the board's responsibility for selecting and appointing an audit agency should be implemented.From the perspective of the auditor of the audit institution,it is necessary to improve their professional ethics awareness,establish and improve the reputation mechanism and litigation mechanism,adhere to the independence of auditing,and be vigilant against the damage to reputation caused by auditing and legal risks.Finally,in terms of market regulation,it should regulate the exchange behavior of enterprises,focusing on companies that frequently exchange or have obvious intentions.