An experimental study of users' responses to qualified audit reports in China

Zhijun LIN*, Qingliang Tang, Jason Xiao

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    26 Citations (Scopus)


    This paper presents the results of an experimental study on users' responses to the qualification of audit reports in China. By employing the type of audit report (e.g., unqualified vs. qualified auditor opinion) as a manipulated variable in the experiment, we found mixed responses from the participants towards the perceived impact of a qualified audit report on users' understanding and use of the financial statements. In general, Chinese users, credit and loan officers in particular, perceived a qualified auditor opinion as having a somewhat negative impact on the credibility of financial statements. However, no significant difference was found in users' investment or credit decisions with respect to their exposure to the financial statements accompanied by an unqualified or a qualified auditor opinion. The study findings suggest that the U.S.-style qualified audit reports have fairly limited "information content" to users in the present Chinese auditing environment and that there is a need to further improve Chinese auditing standards and practices. In addition, the study provides some insights into recent auditing developments in China.

    Original languageEnglish
    Pages (from-to)1-22
    Number of pages22
    JournalJournal of International Accounting, Auditing and Taxation
    Issue number1
    Publication statusPublished - 2003

    Scopus Subject Areas

    • Accounting
    • Finance

    User-Defined Keywords

    • Audit reports
    • Auditor opinions
    • Chinese auditing
    • Non-standard audit reports
    • Qualification of audit reports


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