Research On The Relationship Between High Quality Audit Service And Stock Price Crash Risk

In recent years,capital markets have been turbulent.Time and time again,the financial crisis,the stock market crash has tested our mental capacity.It also makes the risk of stock market crash become a hot topic in academic circles.China's capital markets started later than many foreign financial systems.Laws and regulations,various mechanisms and other aspects are not perfect.So the share price collapse phenomenon also more common.Whether the market value of the whole market evaporates,or some individual stocks are "cut off',It has made us deeply aware that the collapse of the stock price has been a terrible blow to investors and directly affected the healthy development of the whole capital market.It may even bring a financial crisis that will hurt the real economy.So it is urgent to find a way to effectively mitigate the risk of a stock price crash.The first thing we need to understand is what's behind the stock price crash.According to the theory of share price collapse cause,share price collapse is mainly derived from company management out of self-interest and opportunism hidden negative news about company operation,external investors due to the existence of information asymmetry in the market,unable to obtain reliable information comprehensively.The bad news keeps accumulating to the threshold,causing the stock price to collapse after the whole release at some point.On the whole,management fraud and information asymmetry in the market directly trigger the risk of stock price crash.External audit,as an important external component of corporate governance,is responsible for supervising management and improving the quality of accounting information.At the same time,external audit is also an important bridge between management and investors,which plays an important role in reducing agency cost and reducing information asymmetry.Visible,external audit can affect stock price crash risk from the source,so this article from three aspects to research whether external audit can contain stock price crash risk,respectively is the size of the external auditor,the auditor tenure and strength of different styles of reporting period audit and the relationship with the stock price crash risk.This article first to comb the literature at home and abroad in recent years,shows the detail of all kinds of scholar's researches of the different point of view,according to the reference for their research conclusion,and on the basis of the three theories(information asymmetry theory,principal-agent theory and stock price crash risk management theory).This article selects the Shanghai and Shenzhen a-share market in China motherboard of non-financial companies from 2009 to 2016 as the research sample,empirically tested by correlation analysis and multiple regression analysis to find the relationship between the external audit firm size,auditor tenure,strength of audit styles of reporting period and the stock price crash risk.The results show that:(1)the larger the audit firm is,the lower the risk of future stock price crash of the listed company being audited;(2)the longer auditor tenure,the lower the risk of future stock price crash of the listed company with auditor;(3)under the premise of controlling the size of the firm and the auditor's tenure,the more consistent the audit style of different reporting periods of the listed company(i.e.stronger),the lower the risk of stock price collapse in the future.At the end of the article,according to the empirical test of the three conclusions,this paper put forward relevant suggestions to different market subjects:listed companies,accounting firms,the two corresponding regulators,in order to effectively restrain the the future stock price crash risk.Finally,this paper put forward many deficiencies due to capacity constraints in the study,providing direction for further study.