The Research On Influence Of Auditor Industry Expertise On The Stickiness Of Audited Companies

After more than 40 years of reform and opening,Chinese enterprises have achieved leap-forward growth in scale,and the number of Chinese enterprises on the World Top 500 list is increasing.However,what does not match the scale development is that the problems of low management efficiency,inadequate cost control,and backward corporate governance mechanisms have long existed in Chinese enterprises.These problems have led to a tighter profit margin for Chinese companies,and more difficult to obtain higher income.Under the new economic situation,how to make full use of the advantages of auditor industry expertise,with the characteristics of its independence,maintain and improve the competitive advantage of enterprises,regulate managerial behavior,reduce corporate expenses,improve business efficiency,and become urgent problems for the current enterprise development,and they are also the issues that the academic community have focused on in recent years.Based on a systematic review of the auditor industry expertise,cost stickiness and managers' self-interest behavior,this paper is based on principal-agent theory,information asymmetry theory and “deep pocket” theory,in the CSMAR database,2767 Chinese A-share listed companies from 2007-2017 are selected as research objects,according to the needs of the research and the availability of indicators,the relevant indicators are selected.This paper discusses the influence of the auditor industry expertise on the audited company's cost stickiness,and on this basis,further explores the intermediary role of managers' self-interested behavior.The study finds that the higher auditor industry expertise,the lower audited company's cost stickiness.The mediating effect test shows that the manager's self-interest behavior is the intermediary variable that affects the audited company's cost stickiness.The auditor industry expertise influences the self-interested behavior of the audited company's managers,which in turn affects the cost stickiness of the audited company.According to the conclusions of this paper,the following policy recommendations are proposed,the government regulatory department should provide environment for the auditor to develop industry expertise;companies should choose auditor with industry expertise,improve the system to strengthen supervision of managers' self-interested behavior;the auditor should foster industry audit professionals and optimize the organizational structure of the accounting firm.This paper is based on the perspective of external supervision,it not only has the theoretical expansion of the exploration the causes of cost stickiness,but also has a practical level for enterprises to improve their management efficiency,has inspiring to promote firms to get more value growth and accounting firms to be more completive.