Research On The Impact Of Independent Audit On Corporate Risk-taking

Risk taking is a decision-making,which refers to the choice of expected return and volatility in investment decision-making.Enterprises have to control risk,also have to take risk,because risk-taking can help the enterprise gain more profit,accumulate more wealth,for society at the same time,the high risk is always accompanied by high returns.Risk-taking can promote technical progress and accelerate the accumulation of social capital,and it's also the force of the sustained economic growth.Low risk-taking level will lead enterprise to miss the good investment opportunities,lack of competitive advantage and long-term development,but high leval may lead enterprise into a financial crisis.Therefore,how to balance the benefits and risks and how to reasonably allocate risks has become a hot issue in the field of modern financial management and capital market.Independent audit as an important part of external governance,plays an effective oversight role in solving the problem of agency for enterprises.At the same time,audit reports released by the certified public accountants may effect enterprises' financing and equity trading in the capital market.Therefore,we should pay attention to the study on the effectiveness of auditing and the study on the information content of auditing reports.At present,no scholars have studied the impact of audit on the risk taking behavior of enterprises.So can audit supervision affects the risk taking of enterprises?What are the effects? Does the result of auditing affect the investment decisions of external investors and creditors while affecting the decisions of management? What is the impact of management shareholding as an important part of corporate internal governance on the effect of audit opinions? Is such audit supervision and external pressure effective for enterprises with different equity nature? The above problems urgently need to be solved theoretically and empirically.This paper summarizes the corporate governance of the audit's function,the economic consequences of audit reports,literature of enterprise risk from home and abroad.Through the theoretical and normative analysis and empirical research,this paper study the economic consequences of audit supervision and management mechanism.Studying the relationship between audit supervision,management equity,property rights and risk-taking.In addition,the risk taking behaviors of enterprises are subdivided to investment risk and financing risk taking,the impact of independent audit on risk taking of enterprises' r&d activities,capital investment and financing.Through research,this paper get the conclusion:(1)Independent audit is significantly related to the level of risk-taking,and audit does affect the management of investment decision,plays a significant role in governance;(2)Management ownership has a significant positive adjustmenton the relationship between the independent audit and risk taking,this paper argues that management will be moresensitive to the share price volatility;(3)The property has a positive role in relationship between audit and risk-taking,but the results of correlation is not strong,the audit in state-owned enterprises and non-state-owned enterprises listed companies is not significantly difference;(4)Independent audit is positively correlated with risk-taking of r&d and risk-taking of capital investment.Independent audit is negatively correlated with financing risk taking.Based on empirical study's conclusions,this paper shows up some political recommendations: using a variety of ways to improve the quality of audit,creating synergies between equity incentive and audit supervision,strengthen the construction of enterprise internal governance mechanism,and reasonably control of enterprise risk,in order to lead audit better to supervise,enhance the level of corporate governance and improve the efficiency of risk-taking.