Audit Quality And Heterogeneous Institutional Investor Decision-Making

At the beginning of 2004,the State Council issued "Several Opinions on Promoting the Reform and Opening-up and Stable Development of Capital Market ",which clearly required vigorous development of institutional investors,and good policies on institutional investors' equity investment have been promulgated one after another.In March 2012,with the approval of the State Council,the National Insurance Fund Council was entrusted by the Guangdong Provincial Government to invest and operate the primary endowment insurance fund of urban workers in Guangdong Province with a balance of 100 billion yuan.The entry of pensions into the market has further increased the heterogeneity of institutional investors.It is necessary to explore how the audit quality affects the decision-making of institutional investors.This will help relevant departments formulate policies to protect the legitimate rights and interests of institutional investors and the stability of Chinese capital market.According to agency theory and information asymmetry theory,there is serious information asymmetry between management and external investors,large shareholders and small shareholders.However,information asymmetry may lead to the damage of the interests of external investors or small shareholders.In order to alleviate information asymmetry,certified public accountants,as an independent third party,express audit opinions for the financial reports through auditing,which can effectively cut the conflict of interests of stakeholders.As an important part of information disclosure,will audit quality affect institutional investors' shareholding decisions? And whether there are differences in the degree of influence of different institutional investors on decision-making? At the ownership level,institutional investors are more concerned about the inhibitory effect of audit work on what kind of agency problems? There are few references in the existing literature.Therefore,from the perspective of agency cost,this thesis empirically studies the impact of audit quality on the decision-making of heterogeneous institutional investors.This thesis takes the A-share listed companies in 2008-2017 as the research object,regards discretionary accruals as the substitute variable of audit quality,and uses the proportion of institutional investors to measure the decision-making of institutional investors.Firstly,it studies the impact of audit quality on the decision-making of institutional investors in general,and then explores the difference of the impact of audit quality on the decision-making of heterogeneous institutional investors.Finally,from the perspective of ownership,this thesis explores the differences in the degree of impact of audit quality on institutional investors' decision-making in the case of concentration and decentralization of equity,and explains the results.The empirical results show that the improvement of audit quality can improve the proportion of institutional investors,and stress-sensitive institutional investors pay more attention to audit quality.But when the shareholding concentration of the listed company is high,the audit quality has a more significant impact on institutional investors' decision-making.This thesis proves the impact of audit quality on the decision-making of institutional investors as a whole and heterogeneous institutional investors.On the one hand,it helps to formulate relevant policies and regulations such as auditing standards to standardize the audit quality of CPAs.On the other hand,it also provides relevant reference suggestions for institutional investors' decision-making.Under the background of the gradual increase of heterogeneity of institutional investors in China,this will protect small and medium-sized shareholders.It is of great significance to protect and stabilize the capital market.