An Empirical Research Of The Influence Of The Audited Unit Managerial Power On Audit Fees And Audit Opinions

Audit fees and audit opinions are the long-standing topics in the field of audit research.Looking at the research of senior scholars,it is found that the influencing factors of audit fees can be summarized as the characteristics of accounting firms and the characteristics of audited entities.The influencing factors of audit opinions include Earnings management and internal control,corporate governance,etc.In general,whether it is an audit fee or an audit opinion,the influencing factors can be summarized from a large aspect to the characteristics of the accounting firm and the characteristics of the audited entity.These two big directions are mostly based on the number and frequency of research,and the research on the impact of audited unit characteristics on audit matters.Managerial power belongs to the characteristics of the audited entity.Although the managerial power is an important component of the characteristics of the audited entity,the managerial power itself belongs to the organizational behavior,and the organizational behavior originated in the western countries.Most of the research on managerial power in modern academic research focuses on the internal governance and corporate value,management revenue and compensation manipulation,internal control and earnings management,investment efficiency and cash dividends.The research is rarely involved.Similarly,China's research on whether managerial power has an impact and how it affects auditing practices and auditing decisions is rare.The paper combines the power of the audited unit management in the organizational behavior,the audit fees in the audit field and the audit opinions to explore the impact of managerial power on audit fees and audit opinions.The paper selects six single-dimensional variables for the measurement of managerial power,and combines the six single-dimensional variables to construct a comprehensive indicator as the final indicator to measure managerial power.The audit fees are measured by the natural logarithm of the current audit fees,and the audit opinions are measured by standard unqualified opinions and non-standard audit opinions as dummy variables.Based on the sample data of A-share listed companies in Shanghai and Shenzhen from 2011 to 2016,the paper is based on theories of managerial power theory,principal-agent theory,contract theory,information asymmetry theory,economic man hypothesis and opportunistic behavior,and audit negotiation theory.Based on the empirical methods of hypothesis,design variables,and model building,the study found that the greater the power of management,the lower the audit fees,that is,the significant negative correlation between managerial power and audit fees.The greater the power of management,the higher the probability that the audited entity will issue a standard unqualified audit opinion,and there is a significant positive correlation between managerial power and audit opinion.Keeping other variables unchanged,there is a significant negative correlation between audit fees and audit opinions.The worse the audit opinions(that is,the more non-standard audit opinions),the higher the audit fees,or the better the audit opinions,the lower the audit fees.There is a negative correlation between the two.The addition of managerial power affects the negative correlation between audit fees and audit opinions.The specific performance is that the greater the power of management,the weaker the relationship between audit fees and audit opinions.The above conclusions have passed the robustness test.The research of the thesis can provide suggestions and references for the audited entity and the accounting firm.The management unit of the audited entity should be cautious that local management over-uses its power to conduct excessive earnings management,such as audit fees and audit opinions;accounting firms should also conduct audit negotiations in an objective and rational manner,based on the principle of audit cost-benefit.Reasonable audit fee pricing,based on the audited unit business itself issued appropriate audit opinions.