Managerial Ability,Legal Environment And Audit Fees

In the audit market for listed companies' annual reports,there has always been a phenomenon in which bad currencies drive out good currencies.According to the 2017 audit of financial statements of listed companies published by the Chinese Institute of Certified Public Accountants,the overall audit fee is about 5.48 billion,which is an increase of 3.13% compared with last year.China's December year-on-year inflation rate was 1.7%.After deducting the impact of inflation,the growth in 2017 was only 1.41% compared to 2016,and in the Shanghai main board market,it also decreased by 1.22%.This shows that the audit market in China is very competitive.Is the reason for the small increase in audit fees really caused by the low price competition of accounting firms? In the era of modern knowledge economy with globalization,all enterprises are actively attracting and striving for higher-level talents.Therefore,this article studies the impact on audit costs from the perspective of management capabilities,including the following issues:(1)Are the audit fees paid by companies with higher management capabilities reduced?(2)How does the external factor of the legal environment affect the relationship between management capabilities and audit costs?(3)What are the paths through which management capabilities affect audit costs?This article mainly includes six parts.The first part is an introduction.This part includes the research background and significance of this article,research ideas and methods,research content and framework,and innovations and deficiencies.The second part is the literature review.Through the regression of domestic and foreign literature on management capabilities,legal environment,and audit costs,we look for room for continued research in this article.The third part is a theoretical overview of management capabilities,legal environment and audit costs.This part first clarifies who is included in the management of this article,and then defines the management capabilities and legal environment,secondly analyzes the audit pricing model,and finally,elaborate on the theoretical basis of the research object of this article.The fourth part is the assumption of management capacity,legal environment and audit costs,including the negative relationship between management capacity and audit costs,and the positive impact of the legal environment on the relationship between management capacity and audit costs.The fifth part is the analysis of the empirical results in this paper,including sample selection,data processing and model selection,descriptive statistics,correlation coefficient analysis and related empirical analysis,robustness test,further analysis and endogenous test.The sixth part is the main conclusion and enlightenment of this article,combined with the empirical analysis results of the previous article,elaborated the research conclusion of this article in detail,and put forward suggestions from multiple angles.Based on the information asymmetry theory,audit demand theory and capital preservation theory,this paper selects the sample of non-financial listed companies in China's A-share market from 2011 to 2017 as the research object.For the calculation of management capacity,the company first uses envelope data analysis to calculate the company The overall efficiency,and then use the Tobit model to control the year to eliminate the impact of the company's own level,and finally use the residual of the Tobit model as the management ability of the company.After obtaining relevant data,the empirical examination of the impact of management capacity on audit costs and how the legal environment affects the role of management capacity on audit costs.The empirical results show that the level of management capacity helps reduce the audit of listed companies Costs,and the legal environment will improve the ability of management to reduce audit costs.At the same time,this paper further studies whether there are other ways in which management capabilities affect audit costs.It is found that the impact of management capabilities on audit costs,internal control and agency costs Play an important path role.Specifically,on the premise of controlling related variables,this article takes audit cost as the explanatory variable,management capability as the explanatory variable,legal environment as the adjustment variable,and internal control and agency cost as the intermediary variable,to study its internal relationship.This article is based on such a research idea that the ability of high-level management has the ability to involve the internal control of the enterprise,which can effectively control the business risk and investment and financing risk of the enterprise and reduce the information asymmetry inside and outside the enterprise,thereby reducing the company's internal control.Significant misreporting risk,which in turn affects audit costs,and in a strict legal environment,will magnify the impact of corporate risks on the future litigation risks faced by certified public accountants,the higher the audit costs required,at this time,high ability The role of management is reflected,so the better the legal environment,the more obvious the impact of management capabilities on audit costs.At the same time,in order to make the results of this paper credible,this paper re-examines the model by changing the measurement methods of audit costs and management capabilities,and the final results are still reliable.Finally,in order to alleviate possible endogenous problems,this paper uses propensity score matching(PSM)to deal with the endogenousness of this paper,and the results are still reliable.