چکیده:
According to agency theory, managers have much incentive that their audit reports are presented with a favorable opinion. They search for auditors who would comply with their wishes and have fewer professional skepticism and doubt about their financial statements. Expectations that could lead to the phenomenon of audit opinion shopping and increase the likelihood of fraudulent financial statements, which will entail several adverse consequences for share prices in the financial market. Accordingly, the present study first reviews the causes of opinion shopping, and then analyzes adverse consequences of this phenomenon and its effect on accounting and auditing profession. The results showed that the audit’s specific characteristics can provide an important driver for exacerbating the phenomenon of audit opinion shopping Other results reveal that audit opinion shopping entails adverse consequences such as reduced quality of audit and financial reporting. Furthermore, it compromises the auditor’s independence and leads to fraud in financial statements.
خلاصه ماشینی:
Causes and Consequences of Auditor Opinion Shopping Dr. Hossein Fakhari © Associate Professor, Department of Accounting, Faculty of Economics and Administrative Sciences, University of Mazandaran, Babolsar, Iran Esmail Amiri PhD Student in Accounting, Faculty of Economics and Administrative Sciences, University of Mazandaran, Babolsar, Iran (Received date: September 25, 2019; Accepted date: January 22, 2020) According to agency theory, managers have many incentives for their audit reports to be presented with a favorable opinion; they are in search of auditors who will act according to their wishes and have less professional skepticism regarding the financial statements.
Based on this, the present research initially conducts a literature review to explain the causes of auditor opinion shopping and then provides an analysis of the adverse consequences of this phenomenon and its effect on the accounting and auditing profession.
Additionally, due to the adverse consequences of auditor opinion shopping on the capital market, it is expected that the findings of this research can be useful for users such as auditors, the community of certified public accountants, auditing organizations, managers, analysts, creditors, and investors.
For example, researchers in response to the reaction of the Public Company Accounting Oversight Board (PCAOB) in the US regarding auditor independence through mandatory rotation found that competition in the audit market aligned with mandatory rotation can create an opportunity for clients to increase their auditor opinion shopping activities (76).
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