Two Types Of Related Transaction Frequency,Internal Control And Audit Fees

With the development of economy,the structure of capital market and business model of enterprises in our country are becoming more and more complex.In order to adapt to this situation,the cooperation between affiliated enterprises has gradually become a common phenomenon.On the one hand,affiliated party transactions enhance the links between enterprises,decrease transaction costs and increase transaction productivity;on the other hand,affiliated transactions also provide opportunities to adjust earnings for enterprises,damage the rights and interests of small and medium-sized shareholders and disrupt market order.The research on the influencing factors of audit fees in foreign countries started earlier.The audit fees model proposed by Simunic in 1980 is the basis for later scholars to study the influencing factors of audit fees.In 2001,China's Securities Regulatory Commission promulgated the newly revised Standards for the Content and Format of Annual Report of Listed Companies,which stipulated that listed companies should disclose audit fees in annual reports.Domestic scholars began to carry out empirical research on the influencing factors of audit fees.Most of the research on the influencing factors of audit fees in China focused on enterprise size,operational financial risks,corporate governance structure,Accounting firm size and other aspects,most of the research on related party transactions focuses on the empirical study of the relationship between related party transactions and corporate governance,enterprise value,and the case study of the relationship between related party transactions and audit failure.There are relatively few empirical studies on the relationship between related party transactions and audit fees.This paper studies the impact of related party transactions on audit fees from the perspective of transaction frequency,and divides related party transactions into two parts:opportunistic affiliated transaction and decision-making useful affiliated transaction,study the relationship between their frequency and audit fees respectively,and study the moderating effect of internal control quality on the relationship between them.Firstly,this paper defines related concepts such as affiliated transaction,internal control and audit fee.After sorting out a large number of relevant literature,I determined the research content and research framework.Based on the analysis of principal-agent theory,cost-benefit principle and deep pocket theory,combined with previous scholars' research,I further divide affiliated transaction into opportunistic affiliated transaction and useful decision-making.Based on Simunic's audit fee model,this paper constructs three models,and chooses A-share listed companies in China from 2014 to 2017 as samples to conduct an empirical examination of the hypothesis.The results show that,on the whole,the increase of the frequency of affiliated transactions of Listed Companies in China will increase audit fees;the positive correlation between opportunistic affiliated transactions and audit fees is more obvious,while the improvement of internal control quality will weaken the positive correlation between them;this paper also finds that there is no correlation between decision-making useful affiliated transactions and audit fees.On the basis of the research conclusions,this paper puts forward relevant suggestions for regulatory authorities,accounting firms and listed companies.