Controlling Shareholder's Share Pledging,Power Balance With Shareholder Structure And Audit Fee

In recent years,more and more listed companies in China's capital market have used the means of share pledging to raise funds,and the controlling shareholder's share pledging to is also quite common.The controlling shareholder with the advantage of control will greatly affect the interests of listed companies.Existing research shows that the controlling shareholder's share pledging will aggravate its "Tunneling" motives.The falling stock price may also bring the risk of control transfer,which brings operational risks to listed companies.At the same time,controlling shareholders of share pledging are also more inclined to performing earnings manipulation,which reducing the quality of information disclosure.From the perspective of the audit fee model,the cost of the auditor's efforts and the risks faced by the auditors are the main factors which affect the audit fees.If a listed company has a controlling shareholder pledge,the CPA may increase the risk expectation and audit cost input,thus affecting the audit fees.In a listed company with strong power balance with shareholder structure,other shareholders can form a strong constraint on the controlling shareholder's encroachment behavior and earnings management behavior,and the risk brought by the controlling shareholder's share pledging will be reduced,thus affecting the relationship between controlling shareholder's share pledging and audit fees.In addition,enterprises with different property natures are different from the operating risks and earnings management motives of the controlling shareholder's share pledging,and the effect of power balance with shareholder structure is also different.Therefore,in the enterprises with different property natures,the correlation between the controlling shareholder's share pledging and the audit fee is different,so is the adjustment effect of the power balance with shareholder structure.Based on the above considerations,this paper conducts an empirical analysis of the Shanghai and Shenzhen A-share non-financial listed companies from 2012 to 2017 from the perspective of auditors who implement external supervision.This paper analyzes and tests the correlation between the controlling shareholder's share pledging behavior and audit fees and the adjustment effect of power balance with shareholder structure.At the same time,this paper studies the correlation between the controlling shareholder's share pledging and audit fees and the effect of power balance with shareholder structure among enterprises with different property rights.Further,this paper distinguishes between different marketization processes for further research.The study found that compared with the company that does not have the controlling shareholder's share pledging,the company has a higher audit fee for the controlling shareholder's share pledging behavior.The higher the proportion of controlling shareholder's pledge of shares,the higher the audit fee.The study also found that in companies with strong power balance with shareholder structure,the positive correlation between the controlling shareholder's share pledging and audit fees will be weakened.Compared with state-owned enterprises,the positive correlation between share pledging of controlling shareholders and audit fees and the adjustment effect of power balance with shareholder structure are more significant in non-state-owned enterprises.This shows that when CPAs audit non-state-owned enterprises,they can pay more attention to the risk factors caused by share pledging and reflect it in the audit fees.The research in this paper can provide reference for the auditor's pricing decision,the investor's investment strategy,and the supervisor's supervision behavior.