Research On The Influence Of "High Deposit And Loan" On Auditor Behavior

As the enterprises with both high deposits and loans have been exposed to financial fraud,the phenomenon of "high deposit and loan" has aroused the attention of investors and regulators.The most typical enterprises with high deposit and loan are Kangdexin and Kangmei Pharmaceutical.In addition,Tunghsu Optoelectronic,Hongbo,Yihua Lifestyle,Loctek Ergonomic,Muyuan Foods and Kedi Dairy and other companies all have the problem of "high deposit and loan".The events that have happened show that the appearance of high deposit and loan in the enterprise will lead to different problems,generally indicating that one of them is the financial distress of the enterprise.So,what is the cause of these enterprises have a high deposit and loan situation.What impact will the high deposit and loan have on the audit work of accounting firms? These problems deserve further discussion and analysis.In order to gain insight into the "high deposit and loan" phenomenon in listed companies and the impact of the "high deposit and loan" phenomenon on auditor behaviour,this paper draws on previous research results and takes-Tunghsu Optoelectronic-a leading listed company in the photoelectric display material industry,as the research object based on the theory of Private Benefits of Control,Signaling Model,Asymmetry Information and Fraud Triangle.To study and analyse the phenomenon of "high deposit and loan",its motivation and its impact on auditors’ behaviour,using case studies and comparative analysis,taking into account the specific circumstances of the company’s disclosure The details are as follows:Firstly,a review and summary of the domestic and international literature on the causes and economic consequences of the "high deposit and loan",and a review and summary of the domestic and international research literature on auditor behaviour and the factors influencing it.Secondly,it defines the meaning of high deposit and loan and the meaning of auditor behavior,elaborates the theoretical basis,and makes a theoretical analysis of the research issues of this paper: analysis of the motivation of the high deposit and loan,and the mechanism of the influence of the high deposit and loan on the audit behavior;Thirdly,this paper introduces the background of the case,firstly providing an overall analysis of the deposit and loan situation of the industry to which the case enterprise belongs,secondly clarifying the basis for the selection of the case company,and finally introducing the company profile of Tunghsu Optoelectronic,including the company’s profile,organizational structure,financial situation,etc.;Fourth,this paper develops a case study of Dongxu Photoelectric’s double-high deposits and loans,first analysing the characteristics of Tunghsu Optoelectronic’s high deposit and loan and the causes of the high deposit and loan,then analysing the impact of Tunghsu Optoelectronic’s deposits and loans on the auditor’s behaviour,and finally summarising the case’s insights.Through the case study of Tunghsu Optoelectronic,this paper concludes that the high deposit and loan of Tunghsu Optoelectronic are influenced by both external and internal factors,but mainly caused by internal factors of the company.The company’s poor fund management ability leads to low fund utilization efficiency,the inability of the management to keep up with the development of the enterprise,and the imperfect internal control leads to unreasonable guarantee behavior and unreasonable expansion and development strategy.All these factors lead to the existence of the high deposit and loan of the company,and the ratio of interest bearing liabilities to assets has been high.These not only triggered the successive bond default events of Tunghsu Optoelectronic,but also has adversely affected the financial position and business development of Tunghsu Optoelectronic,which further aggravated the phenomenon of the high deposit and loan and high interest bearing liabilities of the company.We analyzed the case and the current situation of the industry and found that,the "high deposit and loan" profile of an enterprise can contribute to a higher assessment of audit risk,a lower likelihood of issuing a standard audit opinion and higher audit fees.In order to reduce and transfer audit risk,auditors will be more prudent in issuing standard audit opinions and increasing audit fees when auditing companies with high levels of savings and loans.It is expected that the research in this paper will explore ways to address the situation of enterprises with high deposits and loans and optimise auditor behaviour,so that more people can understand the causes of high deposits and loans,and also provide reference for other enterprises to optimise their capital management level and rationalise their development strategies.