The Ultimate Control Of The Nature Of The Auditors Choose Geographical Preferences And Business Performance

Enterprises, combination of a series of contracts, are economic carriers for profit. Performance is certainly the measurement of its financial position, operating results and management effectiveness. Research on enterprise performance is uncountable. Scholars studied the relationship between the enterprise performance and the internal holding, equity balance degree as well as the property rights using different enterprise performance proxy variables, but the research conclusion is not very consistent. Especially opinions vary terribly on state-owned enterprise performance or private enterprise performance is higher. With the development of British "privatization" wave in the 1980s, the relationship between state-owned control and enterprise performance has increasingly become the hot topic in the academic research. What are the mechanisms of state-owned controlling influencing enterprise performance? How does state-owned controlling affect the economic behavior of the enterprise? What are the economic consequences of government intervention? These series of problems become the focus of academic debate. In the Chinese market environment, which characterized by relationship economic and unbalanced marketization process, government has always been the traditional intervention. What is the relationship between the enterprise performance and the property of ultimate controller, which is an important part of the situational variable. And whether the auditor choice, as an important external governance mechanism, can effectively affect the enterprise performance or not? Whether the characteristic of ultimate controller can affect the auditor choice or not? Whether the auditor choice plays a role of intermediary variable between the nature of ultimate controller and enterprise performance? Existing literature discusses and analyzes the relationship between the property of ultimate controller and the enterprise performance, the property of ultimate controller and the auditor choice geographical preference, the audit choice geographical preference and the enterprise performance, but there is no literature on the relationship between the three clear empirical research and study conclusion. And how to choose the proxy variables of enterprise performance is a key. Past research widely used a single market performance indicators, economic performance indicators or financial performance indicators, which is relatively partial and not complete. The comprehensive index of enterprise performance (PERF) has been built based on factor analysis. From a new perspective of the auditor choice’s geographical preferences, this thesis studied the relationship between the property of ultimate controller and the corporate performance using multiple regression analysis, Logistic regression analysis methods of grouping and hierarchical regression analysis. The study of this thesis helps to deeply understand how the property of ultimate controller affects enterprise performance and how the huge external audit improves the enterprise performance, and contributes to understanding the relationship between government and enterprises in transition economy and recognizing different ultimate control mechanism and the theory of government intervention. It’s beneficial to reveals the essence of improving business performance. At the same time, it’s quite beneficial for policy makers to set policies and for state-owned enterprises to reform better.Manufacturing enterprises plays an important role in our economy. According to statistics, China’s manufacturing industry won the first big manufacturing country accounts for 19.8% in the global manufacturing in 2010. From 2004 to 2010, more than 40% of GDP (in addition to 37% in 2009) are from the contribution of manufacturing. Different industries, some standards of the measurement are different, so this thesis selected Shenzhen a-share manufacturing listed companies as the research sample, adopted the method of combining normative research and empirical research, and studied the relationship of actual control of human nature, the auditor choice geographical preference and the enterprise performance. Studies have shown that (1) state control led to lower corporate performance; (2) the external governance effects of audit improve business performance; (3) state-owned enterprises have no strong internal audit requirements, its auditor choice has geographical preferences; (4) the reason why different actual controller properties have different enterprise performance is, at least partly, the difference between the auditor choices.This thesis studies the relationship of the actual controllers properties, the auditor choice geographical preference and the enterprise performance based on a new angle of view of the auditor choice geographical preferences, which deepens the existing literature on the research of this field, enriches the actual controller properties’ mechanism of action of enterprise performance under special circumstances. From the point of research methods- the measure of enterprise performance, we abandon the past measure method of the single index, and choose five classes index which can fully reflect the enterprise performance (debt paying ability, profit ability, operation ability and development ability and profit quality in five aspects, at last 18 indexes are selected) to reflects the comprehensive enterprise performance. In order to avoid excessive indicators, we use factor analysis for dimension reduction, and build enterprise comprehensive performance index (PERF) to ensure the scientific nature, rationality of the dependent variable and comprehensive.