Inquiry Regulation Of The Stock Exchange And Audit Fees

Information disclosure is an important institutional arrangement to alleviate information asymmetry in the capital market.It not only helps listed companies to show their business status,but also helps stakeholders and the public to understand the current situation of the company.In order to further strengthen the subjective responsibility of information disclosure of listed companies,the Shanghai Stock Exchange and the Shenzhen Stock Exchange fully implemented the information disclosure through train system in 2013 and 2014,and gradually opened the letter of inquiry and the reply letter from the listed company.The exchange's inquiry focuses on sensitive risk events of listed companies and is a non-punitive measure.Studies have shown that the supervision of enterprises by the regulatory authorities will enhance the auditor's risk perception.From this perspective,exchange challenges will increase the audit risk faced by auditors and thus increase audit fees.On the other hand,the exchange's inquiry supervision will also eliminate information asymmetry to some extent and improve the enterprise information environment.In this case,the audit risk faced by the auditor will be reduced and the audit fees will be reduced.There is no conclusion on how the exchange question affects the auditor's pricing decisions,which remains to be tested.The paper uses the Shanghai and Shenzhen A-share listed companies in 2015-2017 as a research sample to explore the impact of exchange inquiry supervision on audit fees.The study found that exchange advisory has a significant positive impact on audit fees,and that listed companies that receive an exchange inquiry letter will have significantly higher audit fees than companies that have not received an inquiry letter.And the characteristics of different inquiry letters have different effects on auditor pricing decisions.The cross-sectional test based on audit risk found that under different financial conditions,legal environment and equity nature,the impact of exchange inquiry on audit fees is different.Finally,the research conclusions are re-examined by propensity score matching method,lagging one-stage dependent variable and fixed effect model to verify the robustness of the conclusion.This research conclusion not only helps to further understand the auditor's pricing behavior,but also provides a main reference for the regulator to accurately identify the auditor's focus,thereby further improving the efficiency of supervision,standardizing audit behavior,and optimizing the supervision mechanism.