CAO Feng, CHENG Jiaming, ZHANG Xueyan
2025, 0(4): 61-77.
Audit opinion shopping, as a form of information manipulation that undermines the efficiency of capital markets, has garnered significant attention from academics and regulators.Using a sample of A-share listed companies from 2007 to 2021, this study investigates the impact of board faultlines on managerial audit opinion shopping behavior.The findings reveal that the presence of board faultlines significantly increases the propensity of management to engage in audit opinion shopping.This effect is particularly pronounced when management has stronger incentives for opinion shopping, the board's formal hierarchy is higher while its informal hierarchy is lower, internal and external supervision is weaker, management holds a higher proportion of board seats, and in non-state-owned enterprises.Further analysis shows that while board faultlines do not significantly impair the board's advisory functions, they markedly weaken its supervisory effectiveness, leading to an increase in opportunistic behaviors, such as earnings management and higher audit fees.However, this behavior does not significantly increase the likelihood of obtaining non-standard audit opinions, indirectly validating the existence and motivations behind audit opinion shopping.This study not only enriches the theoretical understanding of the factors influencing audit opinion shopping but also provides critical insights into the mechanisms by which board composition affects corporate governance functions.