ABSTRACT:

This applied study aims to investigate whether the opinion conveyed by the audit’s reports differs in effect on the stock price, return, and liquidity. A market-based study was conducted on the qualified and nonqualified audit opinion of the shareholding companies in Jordan during the period 2009 to 2017. This study concludes that there is a significant positive difference between the abnormal average return after and before the announcing date of the qualified report, while the unqualified report shows no difference with a negative sign. The audit reports do not have a direct or substantial impact on the stock price and return on or after the calculation window. The auditing opinions affect the liquidity of each share in the study sample regardless of the audit report type. This conclusion may indicate that audit report users do not understand or appreciate its significance. The researchers suggest investigating the users' trust in the audit report, as users' mistrust of the audit process may be one of the factors for the lack of information contained in the audit report. The present research is original; it gives new proof of the disparity between qualified and unqualified audit reports in a developing world in terms of share price, returns, and liquidity.