Do modified audit opinions have economic consequences? Empirical evidence based on financial constraints

Do modified audit opinions have economic consequences? Empirical evidence based on financial constraints

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 qualit...

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Bibliographic Details
Main Authors: Zhiwei Lin, Yihong Jiang, Yixuan Xu
Format: Article
Language:English
Published: Elsevier 2011-09-01
Series:China Journal of Accounting Research
Subjects:
Modified audit opinions (MAOs)
Economic consequences
Financial constraints
Earnings management
Government intervention
Political connections
Online Access:http://www.sciencedirect.com/science/article/pii/S1755309111000177

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http://www.sciencedirect.com/science/article/pii/S1755309111000177

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