The influence of audit opinions on stock market prices - Empirical research in companies listed on the Ho Chi Minh Stock Exchange, 2022

THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING

HO CHI MINH UNIVERSITY OF BANKING

TA THI THU UYEN

THE INFLUENCE OF AUDIT OPINIONS ON STOCK

MARKET PRICES - EMPIRICAL RESEARCH IN

COMPANIES LISTED ON THE HO CHI MINH

STOCK EXCHANGE

GRADUATION THESIS

MAJOR: ACCOUNTING AND AUDITING

CODE: 7340301

SUPERVISOR: DR. HUYNH THI NGOC ANH

HO CHI MINH CITY – 2022

THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING

HO CHI MINH UNIVERSITY OF BANKING

TA THI THU UYEN

STUDENT CODE: 050606180440

HQ6-GE01

THE INFLUENCE OF AUDIT OPINIONS ON STOCK

MARKET PRICES - EMPIRICAL RESEARCH IN

COMPANIES LISTED ON THE HO CHI MINH

STOCK EXCHANGE

GRADUATION THESIS

MAJOR: ACCOUNTING AND AUDITING

CODE: 7340301

SUPERVISOR: DR. HUYNH THI NGOC ANH

HO CHI MINH CITY – 2022

ABSTRACT

Financial Statements are an essential information channel for investors to help

them analyze, evaluate, and make investment decisions. However, there is a gap

between the expectations of business managers and users of financial statements about

the truthfulness and reliability of financial statements. Therefore, information

asymmetry determines investors to call for auditors' services. Through the audit

reports, the auditors offer a professional, objective, and independent opinion regarding

the presentation in financial statements of the true and fair view of the most significant

aspects of the financial position and performance, in accordance with the accounting

framework. This study investigates the effect of the audit reports containing

qualifications or an emphasis on matter paragraph related to going concern uncertainty

or financial distress on stock market prices in the Ho Chi Minh Stock market. In

particular, abnormal returns are analyzed around the publication date of this audit

report. The event study methodology, focusing on a short event window, was used to

determine whether there was an immediate market reaction to the audit report

announcement. A market-based study was conducted on the qualified and unqualified

opinions, emphasising paraphrasing the shareholding companies listed on the Ho Chi

Minh Stock market during 2018 - 2021. The study's conclusions showed that two types

of opinions negatively affect stock prices in short periods, but this effect is not

significant. In other words, there is no information content in qualified and unqualified

with an emphasis on matter paragraph in the HoChiMinh stock exchange.

DECLARATION OF AUTHENTICITY

I declare that this is my independent thesis. The data used in the thesis are of clear

origin and published following the law. The research results in the thesis are my

research and analysis, honestly, objectively, and by following the reality of Vietnam.

These results have not been published in any previous papers.

Ho Chi Minh City, November 2022

The Author

Ta Thi Thu Uyen

ACKNOWLEDGEMENT

Firstly, I would like to send my profound gratitude to all the lecturers at Banking

university, in the Office of Academic Affairs, and especially to the Accounting and

Auditing Department lectures while studying for a bachelor's degree at the Ho Chi

Minh University of Banking

Secondly, I would like to express my sincerest and most profound thankfulness to

Dr. Huynh Thi Ngoc Anh for her guidance and patience in giving me valuable

recommendations during my study period. I am happy and fortunate to carry out this

study under her supervisor.

Lastly, I would like to thank my family for their support during my study and life.

Without encouragement and sacrifice, I would not have finished this thesis, so I

express my special love and gratitude to them.

In the implementation process, mistakes are inevitable despite consulting,

exchanging, and absorbing suggestions from teachers and friends. With the effort to

improve more and more, I look forward to receiving valuable advice from teachers and

friends.

Warmest regards

Ta Thi Thu Uyen

TABLE OF CONTENTS

ABSTRACT ......................................................................................................................

DECLARATION OF AUTHENTICITY..........................................................................

ACKNOWLEDGEMENT.................................................................................................

TABLE OF CONTENTS ..................................................................................................

LIST OF ABBREVIATIONS ...........................................................................................

LIST OF FIGURES...........................................................................................................

LIST OF TABLES ............................................................................................................

CHAPTER 1: INTRODUCTION.................................................................................... 1

1.1 THE NECESSITY OF THE REPORT........................................................................... 1

1.2 THE AIM OF THE THESIS ....................................................................................... 2

1.2.1 Overall objectives........................................................................................ 2

1.2.2 Detail objectives.......................................................................................... 2

1.3 THE RESEARCH QUESTIONS.................................................................................. 2

1.4 OBJECT AND SCOPE OF THE RESEARCH ................................................................ 2

1.5 METHODOLOGY ................................................................................................... 3

1.6 CONTRIBUTION OF THE THESIS............................................................................. 3

1.7 THE PROPOSED LAYOUT OF THE THESIS ............................................................... 4

CHAPTER 2: OVERVIEW OF THE RESEARCH FIELDS......................................... 6

2.1 FOREIGN RESEARCH ............................................................................................. 6

2.2 DOMESTIC RESEARCH .......................................................................................... 9

2.3 RESEARCH GAP.................................................................................................. 10

CONCLUSION CHAPTER 2 ....................................................................................... 12

CHAPTER 3: CONCEPTUAL FRAMEWORK .......................................................... 13

3.1 THE THEORETICAL BASIS FOR AUDITING FINANCIAL STATEMENTS AND AUDIT

OPINIONS .................................................................................................................... 13

3.1.1 The concept and purpose of auditing financial statements ....................... 13

3.1.2 The types of audit opinions of financial statements.................................. 14

3.2 OVERVIEW OF THE SECURITIES MARKET........................................................... 15

3.2.1 The conception of the Securities market ................................................... 15

3.2.2 Stocks ........................................................................................................ 16

3.3 FOUNDATIONAL THEORIES................................................................................. 18

3.3.1 Agency Theory .......................................................................................... 18

3.3.2 Asymmetric Information Theory............................................................... 19

3.4 THEORY OF EVENT STUDY METHODOLOGY ...................................................... 20

CONCLUSION CHAPTER 3 ....................................................................................... 23

CHAPTER 4: METHODOLOGY................................................................................. 24

4.1 THE METHODOLOGY AND RESEARCH IMPLEMENTATION PROCESS .................... 24

4.1.1 The methodology....................................................................................... 24

4.1.2 Research implementation process ............................................................. 25

4.2 DATA ANALYSIS METHODS ................................................................................ 26

4.2.1 Research hypothesis, sample selection, and research data collection ....... 29

4.2.2 Sampling method....................................................................................... 30

4.2.3 Data collection........................................................................................... 31

CONCLUSION CHAPTER 4 ....................................................................................... 33

CHAPTER 5: RESEARCH RESULTS......................................................................... 34

5.1 DATA ANALYSIS AND RESEARCH FINDINGS....................................................... 34

5.2 RELATIONSHIP BETWEEN TYPES OF AUDIT OPINION AND STOCK PRICE ............. 40

5.2.1 Effect of the qualified audit opinion on stock prices ................................ 42

5.2.2 The effect of the unqualified audit opinion with the emphasis paragraph on

the share price........................................................................................................ 46