Research On The Influence Of Controlling Shareholders’ Equity Pledge On Auditor’s Audit Decision

The controlling shareholder’s equity pledge refers to a financing method in which the owner borrows from a bank,securities company,trust company or other financial institution for a listed company and uses its own shares as pledged capital.Although this method can help the company solve the problem of capital shortage,the controlling shareholders enjoy ownership of the company,the actions of these shareholders may have an adverse impact on the company,especially the risk of transfer of control and increase the business of the company Risk,so this article will study whether the controlling shareholder’s equity pledge will affect the audit decision from the perspective of an external auditor,enrich the existing literature on the impact of equity pledge,and also pay more attention to the controlling shareholder of the enterprise during the audit for the external auditor Equity pledge provides a theoretical basis to help auditors obtain more accurate audit evidence and thus draw more accurate audit conclusions.This article will first explain related research on equity pledge and audit decision-making,and then combine principal-agent theory,information asymmetry theory,signal transmission theory,and cost-benefit theory to theoretically analyze the relationship between controlling shareholder equity pledge and audit decision-making,and propose the research hypothesis of this paper is to finally take China’s small and medium-sized enterprises and GEM companies as the research object from 2009 to2018,and use empirical research to test the relationship between the controlling shareholder’s equity pledge and audit decisions,and make relevant recommendations based on the empirical results.According to the research results of this paper,when there is a pledge of controlling shareholder equity in China’s SMEs,the auditor will charge more audit fees,invest more time,implement more audit procedures and are more likely to publish Standard audit opinion.At the same time,corporate governance has a moderating effect on the relationship between the controlling shareholder’s equity pledge and audit decisions,and can significantly weaken the impact of controlling shareholder’s equity pledge on audit decisions.Finally,according to theresearch conclusions of this article,some feasible suggestions are put forward:strengthen the emphasis on the controlling shareholder’s equity pledge from the perspective of the auditor,strengthen the internal governance of the company from the perspective of the enterprise,and strengthen the construction of laws and regulations from the external perspective,and supervise the disclosure of corporate information to create a fair and safe equity pledge environment.At the same time,the shortcomings of this paper are that the selection of the controlling shareholder’s equity pledge variable is relatively single and lack of research on the path of the impact of the controlling shareholder’s equity pledge.In the future research on the impact of the controlling shareholder’s equity pledge,an unlisted company or an enterprise can be selected as the research object.