Financial Sustainable Growth Deviation,Managerial Power And Audit Opinion

As the most important way for companies to disclose information publicly,financial reports have become an important reference for decision-making by outsiders such as investors.Based on the rational economic man hypothesis and the principal-agent hypothesis,internal and external stakeholders of the company have a need for third-party assurance services in order to ensure the truthfulness and fairness of financial reports,thereby reducing the degree of information asymmetry and reducing the coordination and cooperation costs of all parties.Under the modern risk-oriented auditing model,the CPA will pay more attention to the risk of material misstatement of the company.When publishing the audit opinion,it will trace the risk of material misstatement to the business risk and strategic objectives of the company,in order to understand and evaluate the risk of material misstatement of the company from the root cause.The growth of a company is one of the most important strategic decisions that every company is eager to focus on,and it plays a vital role in the future development of the company.According to the theory of sustainable growth,the growth of enterprises does not mean that the value of enterprises must achieve the same growth.The growth above or below the sustainable growth rate will cause the company to fall into a crisis of continuous operation.In the long run,it will damage the long-term interests of the investors.Therefore,when the CPA performs audit procedures and publishes audit opinions,it will inevitably focus on the operational risks brought about by the actual growth rate deviating from the sustainable growth rate.Then,what is the relationship between the financial sustainable growth deviation and the audit opinion?The diffrence in the direction of deviation means different audit risks for CPAs,so which direction is the CPA more sensitive?At the same time,studies have shown that managerial power has an impact on audit opinion and financial sustainability.So what role does managerial power play in the relationship between financial sustainable growth deviation and audit opinion becomes the issue to be considered in this paper.Taking companies listed on Shanghai and Shenzhen A-share from 2012 to 2017 as the research samples,this paper uses Higgins' sustainable growth model as the basic measurement model for financial sustainable growth,and uses the operating income growth rate as the proxy indicator of the actual growth rate of listed companies,and the two are subtracted to construct a financial sustainable growth deviation,and then test the relationship between it and the audit opinion.In the later stage,managerial power was introduced to test the adjustment effect of the relationship between financial sustainable growth deviation and audit opinion.According to the empirical results,we can find these:(1)The deviation of the sustainable growth of corporate finance is positively correlated with the non-standard audit opinion;(2)Under the same conditions,when the listed company's financial sustainable growth is biased downward,it is easier to be issued a non-standard audit opinion;(3)Managerial power has a regulatory effect on the relationship between financial sustainable growth and audit opinion,and there are differences in different dimensional indicators.The comprehensive index of managerial power has a negative impact on the relationship between financial sustainable growth deviation and audit opinion.Finally,this paper proposes relevant policy recommendations for the empirical results from the formulation of financial policies and strategic objectives,the improvement of external supervision mechanisms,and the strengthening of internal governance.