کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
1004445 1481885 2011 20 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
Do modified audit opinions have economic consequences? Empirical evidence based on financial constraints
موضوعات مرتبط
علوم انسانی و اجتماعی مدیریت، کسب و کار و حسابداری حسابداری
پیش نمایش صفحه اول مقاله
Do modified audit opinions have economic consequences? Empirical evidence based on financial constraints
چکیده انگلیسی

We present a framework and empirical evidence to explain why, on average, 11% of listed firms in China received modified audit opinions (MAOs) between 1992 and 2009. We argue that there are two reasons for this phenomenon: strong earnings management incentives lower firms’ financial reporting quality and soft budget constraints weaken the information and governance roles of audit opinions. We find that firms’ financial constraints eased after receiving MAOs, which suggests that MAOs have limited economic consequences. Further analysis shows that this phenomenon predominantly exists in government-controlled firms and firms that receive MAOs for the first time. We also find that MAOs have not influenced financial constraints after 2006. Finally, we find that MAOs did not affect borrowing cash flows from banks until 2005, suggesting that MAOs did not start affecting bank financing until that year. We also find that firms receive more related-party financing after receiving MAOs. Our results indicate that a limited effect on bank financing and increased related-party financing reduce the effect of MAOs on financial constraints.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: China Journal of Accounting Research - Volume 4, Issue 3, September 2011, Pages 135–154
نویسندگان
, , ,