Causes and Consequences of Audit Opinion Shopping

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.