Equity Pledge Of Controling Shareholder,Earnings Management And Audit Fees

Research background:At the beginning of 2018,China securities regulatory commission,Shanghai and Shenzhen exchanges successively issued new policies on supervision of pledged repurchase by securities firms,which further stipulated equity pledge in terms of the party involved,the party involved,the pricing principle,the management of pledge concentration and follow-up.In recent years,pledge of equity is very common in listed companies in China.The advantages of equity pledge include clear ownership and strong liquidity;The use of the equity pledge is not restricted,and the controlling shareholder does not need to disclose the use of the equity pledge;After pledge,shareholders' control right,voting right and decision-making right are not affected.At the same time,the potential risk of the pledge of controlling shareholder's equity in the capital market is also increasingly prominent.In the existing studies on the pledge of controlling shareholders' equity,most scholars believe that the pledge of controlling shareholders' equity will increase the risk of the audited company and influence the auditor's audit decision to some extent.The relationship between shareholders' equity pledge and earnings management,earnings management and audit charges is also covered in the literature.The definition of audit decisions in existing studies is usually divided into two aspects:audit fees and audit opinions.Since the purchase of audit opinions is likely to be reflected in abnormal audit fees,this paper will mainly study the pledge of controlling shareholders' equity and audit fees.The research question of this paper is:will the pledge of the controlling shareholder affect the audit fee and what is the transmission path?Research ideas and main innovation:this article selects all parts of the A shares in 2013-2017 state-owned listed companies as the original sample,according to the proposed hypotheses,draw lessons from the research achievements of predecessors,according to the optimal sequence financing theory,principal-agent,asymmetric information theory,surplus management related theory analysis,regression analysis model is established to assume one by one to empirical study:(1)the controlling shareholder equity pledge and the relationship between audit fees;(2)the relationship between the pledge of the controlling shareholder's equity and earnings management;(3)the relationship between earnings management and audit fees;(4)verify the intermediary role of earnings management in the influence of the pledge of controlling shareholders on audit fees.Thirdly,the robustness test and further analysis are carried out.Finally,combined with the results of empirical research,this paper proposes countermeasures and Suggestions for listed companies,auditors and small and medium-sized investors when they face the risk concerns of controlling shareholders' equity pledge.The main innovation of this paper lies in:constructing the transmission mechanism of controlling shareholder's pledge behavior affecting audit charge through earnings management,and elaborating the logical relationship.The following findings are found in this paper:(1)The pledge behavior of controlling shareholders will lead to the increase of audit fees;(2)The pledge of controlling shareholders' equity is negatively correlated with manipulative accrual earnings management,and positively correlated with authentic earnings management.(3)Both manipulative accrual earnings management and authentic earnings management behaviors of enterprises are positively correlated with audit charges;(4)Real earnings management ACTS as an intermediary between the pledge of controlling shareholders'equity and audit fees.