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This study examines how the legal and regulatory changes in China affect the relationship between client economic importance and audit quality. At the individual auditor level, we find that the propensity to issue modified audit opinions (MAOs) is negatively correlated with client importance from 1995 to 2000. However, from 2001 to 2004, when the institutional environment became more investor-friendly, the propensity to issue MAOs is positively associated with client importance. These findings are corroborated by an analysis of regulatory sanctions. Although client importance measured at the office level is also negatively related to the propensity for MAOs from 1995 to 2000 without controlling for the auditor-level client importance, this result is sensitive to model specification and sample composition. Our results suggest that (1) institutional improvements prompt auditors to prioritize the costs of compromising quality over the economic benefits gained from important clients; and (2) the impact of client importance on audit decisions appears to be different at the individual auditor and office levels.

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This study, using data from the Chinese stock market, investigates the relationship between earnings management induced by profitability regulation and modified audit opinions (MAOs). We review recent developments in the accounting profession and in independent auditing to foster an understanding of the environment in which Chinese auditing operates. Based on annual reports published by listed companies from 1995 to 1997, we analyze the underlying reasons for MAOs. Our test results show a significant association between receiving MAOs and reporting profits marginally above the target levels specified in stock de-listing and rights offering regulations. Our findings are consistent with the notion that asymmetric profitability requirements exacerbate managers' propensity to engage in earnings management, which in turn is positively associated with receiving MAOs. Though based on Chinese data, our findings are of general interest because they address a fundamental issue of trade-offs between expected costs and expected benefits in deciding whether to avoid MAOs in a transitional economy.

PurposeMicroRNAs (miRNAs) play an essential role in breast malignant tumor development and progression. The development of clinically validated biomarkers for primary breast cancer (BC) has remained an insurmountable task despite other advances in the field of cancer molecular biology. The objective of this study is to investigate the differential expression of miRNAs and the potential of circulating microRNAs as novel primary breast cancer biomarkers.MethodsOur analyses were performed on 48 tissue and 100 serum samples of patients with primary BC and a set of 20 control samples of healthy women, respectively. The relative expression of ten candidate miRNAs (miR-106b, miR-125b, miR-17, miR-185, miR-21, miR-558, miR-625, miR-665, miR-92a, and miR-93) from the results of four bioinformatics approaches and literature curation was measured by real-time quantitative reverse transcription PCR (qRT-PCR).ResultsThe level of miR-92a was significantly lower, while miR-21 was higher, as previous reports, in tissue and serum samples of BC than that of healthy controls (p < 0.001). Logistic regression and receiver operating characteristic curve analyses revealed the significant and independent value (p < 0.001) of the miR-92a and miR-21 expression quantification in serums. Moreover, the comparison with the clinicopathologic data of the BC patients showed that decreased levels of miR-92a and increased levels of miR-21 were associated with tumor size and a positive lymph node status (p < 0.001).ConclusionsThese findings suggest that many miRNAs expressions are altered in BC, whose expression profiling may provide a useful clue for the pathophysiological research. Circulating miR-92a has potential use as novel breast cancer biomarker, which is comparable to miR-21.