A Study On The Impact Of Agent Conflict To Effectiveness Of Audit Constraints From The Perspective Of The Major Shareholders Occupying The Funds

In the backdrop of the control of major shareholders to listed companies and the weak protection to investors from laws, we have a study on the impact of the agent conflict to the effectiveness of the audit constraints, it will have a very great theoretical and practical significance. We use the experience data of China's capital market, combined with the institutional context of China's listed companies, for studying the relationship between the agent conflict and the effectiveness of the audit constraints with the theoretical analysis and empirical research. The major shareholders occupying the funds of listed companies has been a very widespread and serious problem that prevents the healthy development of the market economy, it is an area worth exploring, so this article attempts to find that as a corporate governance mechanism the audit is whether able to play a role or not from the perspective of the funds occupied by the major shareholders, so as to monitor the behavior of major shareholders better, protect the interests of small and medium-sized shareholders, promote the healthy development of securities markets and provide some useful inspiration and advice.In this paper, we use the major shareholders occupying the funds of listed companies as an alternative variable of proxy conflict between the major shareholders and small,medium-sized shareholders, based on the relevant data from 2005 to 2007, from the perspective of the auditor choice we study China's listed companies are whether willing to hire high-quality accounting firm to enhance investor confidence in the authenticity of accounting information, thereby reducing the associated agency costs; simultaneously from the perspective of the audit opinion we research when auditors issue their audit opinion ,whether they take into account the existence of the agency problem on listed companies, thereby audit opinion will inhibit the great invasion and occupation acts of the major shareholders. Empirical results show that when auditors issue audit opinion in the audit report, they will take into account the occupation of the capital by the major shareholders. The more seriously the major shareholders occupy the non-operating funds, the more likely it will be issued non-standard audit opinions in the report by the auditors. The positive correlation between the major shareholders occupying the operating funds and non-standard audit opinions was not significant. This shows that our auditors have some understanding of the major shareholders occupying the funds which appears in China's capital market, and will reflect this in the audit opinions. Based on this, this paper presents the relevant policy recommendations on how to conduct high-quality audit requirements and to further improve the quality of the audit opinions.