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Web of Proceedings - Francis Academic Press
Web of Proceedings - Francis Academic Press

Audit Manipulation: the Analysis of Modified Audit Opinions and Subsequent Audit Opinions’ Statements in China

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DOI: 10.25236/meici.2019.008


Yang Wang, and Lei Han

Corresponding Author

Yang Wang


Audit opinion is the core outcome of auditors and it is the final judgement on whether the audited company’s financial report is in accordence with the legion of accounting standards. Usually once the audit opinion is issued, it can’t be roll back or withdrew. But we find that in recent years there are several audit opinions were rolled back throught the subsequent statements on modified audit opinions. So our paper studied on the phenomenon of audit opinion rollback based on a full sample of most recent five years. We found that considering the relative short time duration between the issuance of MAO and subsequent assurance, and the nature of the used matters to modify the audit opinion, it is more likely that the CPA firm and its client, before the audit report is even issued, have already strategically planned for the type of audit opinion and the possible subsequent moves to favor the client. That is, the CPA firm issues the MAO and the special statement about the modifying matter first, and then rolls back the impact of the afore mentioned matter in the follow-up assurance. In this way, the auditors can shield themselves from the risk from issuing un-proper opinion, and the client can get rid of the negative impact of the MAO. Such kind of things should be paid more attention by the regulators, auditors themselves and the investors. We may take measures on prohibiting those things happen to let the stock market well operated.


Modified audit opinions, Subsequent audit opinions’ statements, Audit manipulation