The Effect Of Short Selling Mechanism On Audit Fees

Margin business is a new business in China,in October 27,2005 the revised "Securities Law" will be officially introduced Margin Trading Commission issued "Chinese,Chinese began to approach" margin management pilot securities companies in China's securities market financing business pilot work in June 30,2006,officially launched in October 5,2008.The Shanghai stock exchange and the Shenzhen Stock Exchange since the March 31,2010 opening of the margin trading system,marking the formal establishment of the shorting mechanism of A stock market.China's A stock market is no longer the single market,investors can buy and sell stocks in the securities company borrows money,the introduction of the short selling mechanism has enriched the investment tools and investment methods of China's capital market,increase the vigor of the capital market,have a significant impact on the capital market.Investors will not only benefit from stock appreciation,but also benefit from undisclosed negative news from listed companies,which increases the attention and supervision of investors and regulators to listed companies.On the other hand,it increases the motivation of investors to dig out negative news of listed companies.The changes in the regulatory environment and the change of information transparency affect the behavior of investors and regulators.As the inspector of the order of the securities market,the accounting firm must try to improve the audit work method and the standard of the audit service charge according to the risk condition.In this paper,the two cities of Shenzhen and Shanghai listed companies as samples,through the combination of theory and empirical methods,natural experiment in China opened the margin trading to build the double difference model(DID),based on the effect of short selling on audit fees.The inspection found that margin for the target company,introduction of the short selling mechanism significantly increases the audit fee,furt her study found that the quality of internal control of listed companies of different audit fees increased more significantly,the non state-owned enterprises listed company audit fees significantly degree higher than the state-owned enterprises,short selling in batches test showed that the rise of short selling on the effect of audit fees decreased gradually.