Institutional Difference And Auditor Choice

At present,China's multi-level capital market infrastructure continues to improve,it has formed a board,small board,the GEM and the new board of the four co-complementary plate.With the reform,in particular the three new board tiered system establishment and registration system approaching,in this context,as increased market efficiency,enhance the effectiveness of market auditor,is also facing a series of new opportunities and new challenges.Among them,the relationship between the institutional differences with auditors selected to become a problem can not be ignored.Traditional research looking at what factors affect the choice of auditor time,tend to focus on the company's internal governance factors,ignoring the difference between the external system in which the company,in particular environmental institutional differences in different regions and different sections of the system caused by differences in management layer auditor selected different tendencies.This paper predecessors research results and related theoretical basis,focuses on the impact of multi-level capital market system differences in the selection of the auditor.Institutional differences include institutional differences institutional differences in different regions and among different sectors,in which the difference between the different sections of the system is subdivided into differences and listing system delisting system differences.Based on this,we propose the following four hypotheses:Hypothesis one: firm size and audit quality there is a significant positive correlation;Hypothesis two: to meet other conditions Listed three new board listed companies tend to choose higher audit quality,and meet the conditions of the GEM board listed companies and their audit quality preference no significant correlation;Hypothesis Three: Reach the other plate delisting warning mechanism for new three-panel business,with its preference for the audit no significant correlation,but an early warning mechanism to reach the GEM companies is significantly lower audit quality selection tendencies.Hypothesis four: Institutional Environment Area Manager by selecting low-quality audit inhibition,making it more likely to choose the larger firms.In this paper ended December 31,2015,China's GEM listed companies and three new board listed companies as samples,to intercept one relationship between the effective sample inspection system differences with the auditor choice,discretionary accruals will be estimated by Jones model as earnings management metrics,the market index,sector differences metrics were used as explanatory variables,and adding the total asset growth,total assets,return on total assets,total assets and liabilities,ownership concentration,sales growth,liquidity rates and time listed with industry dummies as control variables,the four models of these hypotheses empirical analysis,and the following conclusions:Conclusion one: the new three-panel market,firm size and audit quality is a significant positive correlation.Conclusion two: multi-level capital market due to differences in market listing system to meet the other conditions Listed companies significant new board tend to choose large scale firms;meet companies listed on GEM Board listed the tendency was not significant.Conclusion three: Due to differences in multi-level capital market market back system,touching other sections delisting warning three new board business auditor choice is not significant tendency;the GEM listed company's earnings management,while at the firm changed often by a "big the" convert to another "as big" hit its delisting warning auditor choice is not significant.Conclusion Four: Due to environmental differences in different parts of the system,market-oriented process with the auditor to select a significant positive correlation.And the market process as outside the enterprise system environment,and indeed by inhibiting management earnings management in order to select new board listed companies conduct large-scale firms play a catalytic role.Therefore,China's capital market reform,the need to constantly improve the external institutional environment,promote regional market-oriented reform process.The need to accelerate the construction of different levels of capital markets rotation plate mechanism,construction of multi-level capital market complementary synergy.The need to strengthen law enforcement,and resolutely implement the existing market system to protect market order,the implementation of delisting mechanism.We need to establish a sound regulatory mechanism,strengthen the auditorslearning and training auditors.