Research On The Impact Of External Audit Governance On The Agency Cost And Enterprise Performance Of China's Manufacturing Listed Companies

With the vigorous development of China's economy,the division of labor has gradually appeared in the aspects of resources,technology and management.The company's business mode has gradually transformed into the separation between ownership and management rights.Under such circumstances,managers accept the owners' trust to control the company's resources and wealth and manage the company's economic activities,that is,managers dominate the management rights of the company.Therefore,the owners plays the role of the delegator,the managers plays the role of agent,principal-agent relationship was born.Inside the company,due to the existence of the principal-agent relationship and the asymmetric information between the principal and the agent,agent conflicts occur from time to time.External auditing is one of the indispensable external governance mechanisms in the modern company management system.An independent external auditor has identified and evaluated the company's financial statements,making the company's information more transparent and transparent,thereby alleviating agency conflicts within the company and reducing Information asymmetry between the principal and the agent,reducing the agency costs and improving corporate performance.As an external monitoring mechanism that can guarantee the quality of corporate information disclosure,reduce company agency costs,and improve corporate performance.At present,external audit governance is a key research content in theoretical and practical circles.First of all,we use literature analysis method to analyze and summarize domestic and foreign literatures about external audit governance and agency cost,external audit governance and enterprise performance,providing a basis for the research direction of this article.Secondly,this paper adopts normative research method to combine the main contents of this paper with principal-agent theory,asymmetric information theory and signal transmission theory,and then puts forward the hypothesis and establishes the model.After a series of screening of Listed Companies in the A-share manufacturing industry of the two cities of Shanghai and Shenzhen in China in the past 2014-2016 years,the sample data of the final introduction of the model is 4161.Starting from the definition of external audit governance,based on external audit governance by self governance,audit opinions and audit quality as alternative indicators of external audit governance,emphasize the initiative of external audit governance;in addition to the main use of external governance audit norms,the use ofChinese certified public accountants comprehensive evaluation of the accounting firm as an alternative to the score variable external audit governance,conduct a robust test to the empirical test of the relationship between external audit governance and agency cost,external audit governance and corporate performance.This paper demonstrates that the external audit governance can effectively alleviate the internal agency conflict,reduce the agency cost and improve the enterprise performance.Finally,based on the results of empirical research,based on two aspects of chartered public accountant audit and enterprise,this paper puts forward some suggestions to improve external audit governance and ease the conflict of internal agency.It is expected to better operate the external audit governance and improve the operation efficiency of the capital market,so as to reduce the agency cost and improve the enterprise performance.