Group Unified Audit And Stock Price Collapse Risks

Since the establishment of China's capital market in the 1990 s,there have been seven rounds of stock price "crash and jump" in the stock market.Under the situation of cross-holding and pledge of stock right,the stock price crash may cause the chain reaction in the capital market,thus forming the system risk.How to prevent the occurrence of regional system risk more effectively is the important work content of current capital market supervision.From the perspective of capital market supervision,social audit is an indispensable part of the capital market supervision system and plays an important role in preventing systemic risks in the overall market.Enterprise group is a relatively common and important organizational form in the current capital market,but few literatures analyze the impact of auditing on the group level and stock price crash.Therefore,this paper studies the influencing factors of stock price crash risk from the perspective of group unified audit.Can unified auditing at the group level to some extent curb the risk of stock price crash?Group unified audit can make the audit from above the level of individual exposure group,affiliated transactions within the risk management process,and money lending and other information,through analyzing the integration of information and then identify the bad news hidden behavior of management,forcing management gradually disclosure of bad news,gradually integrated into the share price,to avoid the cumulative lead to share price collapse.In addition,different enterprises have different governance effects due to their internal governance differences.Compared with the enterprises with poor internal control,the governance effect of group unified audit on stock price crash can be exerted more effectively under good internal control.Secondly,due to the particularity of group audit,it will pose a threat of economic dependence on accounting firms and require higher professional quality.Therefore,the governance effect of unified audit by firms of different sizes on stock price crash risk may be quite different.Therefore,this paper takes the A-share listed companies in China from 2009 to 2017 as the research object to explore whether the group audit mode can reduce the future stock price crash risk of listed companies in the group.At the same time,grouping regression was conducted according to internal control and firm size to explore the influence of internal control quality and firm size on the relationship between group audit mode and stock price crash risk.The research findings of this paper are as follows :(1)there is a significant negative correlation between the group unified audit and the stock price crash risk,indicating that the group unified audit can help curb the stock price crash risk;(2)for companies with better internal control,the negative effect of group unified audit on stock price crash risk is more significant,indicating that the inhibiting effect of group unified audit on stock price crash can be exerted more effectively under good internal control.(3)compared with choosing a small firm,choosing a large firm for a unified group audit has a more significant negative effect on the risk of stock price crash,indicating that a unified group audit by a large firm can better inhibit the risk of stock price crash.This paper extends the economic consequences of the group's unified audit to the risk of stock price crash.Enriched the audit and stock price crash risk field of literature.At the same time,the research results of this paper provide a reference for the establishment and improvement of policies related to the unified audit of the group.It is helpful for enterprise groups and subordinate companies to provide some Suggestions on the selection of group audit mode and firm size.Help investors in the investment decision to choose a reasonable analysis of the underlying stock,identify the risk.