Corporate Strategic Deviance,Internal Control And Auditors’ Decision-making

According to the theory of risk-oriented auditing standard,auditors need to identify the risking factors of the companies and make decisions carefully.Auditors’decision-making not only has an important impact on avoiding risks and choosing clients,but also is useful to stakeholders to make decisions.Researches show that corporate characteristics are one of the important factors that affect the auditors’ decision-making.Corporate strategic deviance has caused the company’s differences in market and channel,products and services,income and risk,competitiveness and potential,etc,which affect the decisions of stakeholders in many ways.Auditing Standard clearly states that Certified Public Accountants should know the audited unit and its environment in order to identify and evaluate the misstatement risk of financial statements and provide an important basis for its professional judgment.The strategic characteristics should be classified as one of the important contents that should know.Then,whether the corporate strategic deviance will affect the auditors’decision,whether there are differences in the influence of the corporate strategic deviance on the auditors’decision,and whether the quality of the internal control will strengthen or weaken the regulating influence on the strategic deviance and auditors’ decision,need to be further revealed.Thus,taking A-share listed companies from 2013 to 2018 as samples,the paper demonstrates the influence of corporate strategic deviance on auditing opinion,auditing pricing decision and customer resignation decision;tests the influence of company internal control on the relationship between strategic deviance and auditors’ decision;and further tests the intermediary mechanism of corporate strategic deviance affecting auditors’ decision.The results show that:(1)the corporate strategic deviance is significantly positively related to audit opinion.The greater strategic deviance of the company,the higher possibility of the auditor issuing the non-standard auditing opinion.(2)the corporate strategic deviance is significantly positively related to auditing pricing.Facing customers with slight deviance,the fees required by auditors is higher.(3)the corporate strategic deviance significantly affect the resignation decision of auditors.The greater strategic deviance of the company,the lower the possibility of resignation.(4)The regulation effect of internal control is significant,good internal control will restrain the adverse influence of the company’s strategic deviance on auditor’s decision.(5)accrued earnings management plays a part of intermediary role.The company strategic deviance influences the auditors’ decision through the earnings management.Based on the conclusion,the paper puts forward some suggestions.Au ditors should pay attention to the characteristics of corporate strategic devi ance and make scientific decisions.Companies should reasonably control th e degree of strategic deviance and prevent the risk of excessive strategic deviance.Companies should strengthen internal control and take advantage of internal control to check and supervise.The auditing standards could refi ne the provisions for assessing the strategic characteristics of the company.