Research On The Impact Of Financial Listed Companies' Legal Risks On Audit Pricing

The financial market is full of high risks,and its development is also changing rapidly.The legal environment is the basis for modern financial companies survival and healthy development,and it also affects or constrains its behavior.Legal risk has become an important risk faced by corporate in market operations.Legal risk means that in the daily operation of a financial company,its behavior does not comply with the provisions of the law or the contract,which raises some legal issues and in turn causes damage to the company in terms of economy and reputation.When an accounting firm finds that a financial company has a high legal risk,the audit risk is also high.At the same time,in order to provide reasonable assurance,more audit activities need to be arranged to improve the quality of the audit service.Then,from the perspective of risk and cost,accounting firms may set higher audit service price standards.In fact,does the accounting firm determine different audit pricing for financial listed companies with different legal risk levels?Under the risk-oriented audit mode,the impact of legal risks of financial listed companies on audit pricing is worthy of further study.After collating and analyzing the relevant literature on financial audit pricing and legal risk,it 1s found that the existing research can be classified into two categories:one is that the research object is mainly non-financial listed companies,and the other is that the measurement of legal risks in the study is not objective and comprehensive.Considering that the characteristics of the financial industry are quite different from those of other industries,and there are very few audit pricing studies for companies specializing in the financial industry,this paper takes the financial companies listed on the A-shares from 2014-2017 as a sample to study the impact of legal risk of financial companies on the audit pricing.On the one hand,financial subjects have their own unique aspects compared with other subjects.Therefore,auditing pricing in the financial industry 1s a very important field in audit research.It is even more necessary to study and discovery the important influencing factors of audit pricing of financial subjects.On the other hand,in the process of further improving the legal environment in China,it is very meaningful to conduct a further study on how legal risks affect audit pricing,in order to improve the quality of auditing,standardize audit pricing and ensure the stable and coordinated development of auditing business.This paper studies the impact of legal risk on audit pricing through the combination of theory and evidence.The first is to use multiple theories as the basis of analysis and propose two research hypotheses in a problem-oriented way.The second is by using of SPSS software,carrying out a hierarchical,multi-step regression analysis.In addition to the overall analysis of the whole sample,this paper also conducted a comparative analysis between banking and non-bank financial institutions,which achieve further testing of research hypotheses and discover new research results.The empirical results show that the legal risks of financial listed companies have a significant positive impact on audit pricing.However,between banking and non-bank financial institutions,CPAs have different degrees of sensitivity to legal risks when evaluating audit risks.This is mainly because the external regulatory environment of the banking industry is relatively strict,so CPAs are more sensitive to legal risks.But the external regulatory environment of non-bank financial institutions is more relaxed,so the sensitivity of CPAs to legal risks will be weakened.Thispaper enriches the research content of financial audit.In terms of research samples,not only the entire financial industry was selected,but also compares the financial industry into different categories and conducts a comparative study of audit pricing,which has made a certain theoretical contribution to the subsequent research on the relationship between financial audit pricing and legal risk.At the same time,the study also added industry-specific indicators to the model,extending the audit pricing model.