The Impact Of Earnings Management On Social Responsibility Under High-quality Auditing

The companies assume both financial responsibility and corporate social responsibility(CSR).Financial responsibility is directly related to the economic profit.However,CSR can only bring reputation and approval without any direct profit.So,the directors have to balance the relationship of the two responsibilities.The relationships between CSR and financial performance,earnings management(EM)have been important studies people concerned.Financial performance can be reflected by financial report with auditing,CSR performance can be reflected by CSR report without any auditing.The auditors concern CSR only when they assess the risk of misstatement and internal control.We pay attention to how EM influences CSR,whether and how auditing will influence the relationship mentioned above.Based on reviewing literature home and abroad,we use the legitimacy theory to analyze the impact of EM on CSR,and reputation theory to analyze the impact of audit quality on EM;then make a test with two models and the data from 2012-2015 Chinese A-shares market..The empirical tests show that the more EM companies make,the more CSR they perform;high-quality audit can make EM less.Then,it is not difficult to draw a corollary,the auditing quality is higher,the CSR is worse.We build the third multiple regression model and make a test,it shows that the auditing quality is higher,the CSR is better,which is exactly the opposite of the corollary.We think that it may be caused by the auditing quality.So we analyze the mechanism and conclude that high-quality audit may weaken the positive relationship between EM and CSR.The conclusion has been confirmed by the empirical test.We proposes three suggestions according to the findings,that is giving full attention to the companies' financial responsibility and CSR,improving the audit quality to promote the companies' performance of financial responsibility and CSR,strengthening supervision.The innovations are taking the RKS Index as an alternative variable of the performance of the listed companys' social responsibility,and add the variable of high-quality audit in the study of earnings management affecting corporate social responsibility.