Share Pledge Of Controlling Shareholders,Tunneling And Audit Fees

Under the circumstance that the country as a whole advocates "deleveraging" and reduces financial risk,the risk of share pledge market is concerned.In 2018,relevant security regulatory authorities once again issued paper restricting the proportion of share pledge of listed companies to reduce financial leverage risk.Under the pressure of economic downturn,the systematic risk of share pledge is prominent.Ownership concentration of Chinese listed companies is high averagely,and the controlling shareholder is closely related to the company operation.The main problem of corporate governance is not the first kind of agency problem,but the conflict between the external minority shareholders and the corporate insiders,namely the controlling shareholders.Although share pledging is the financing behavior of controlling shareholder,it can affect corporate governance and then cause economic consequences to the external of the company.Auditor is the important link of capital market supervises and trusts financial information disclosed by listed companies.It is of great significance to reduce the negative governance effect of share pledge and strengthen supervision.Therefore,under the above background,this article combines the present situation of share pledge in China,focuses on whether auditors pay attention to the share pledge of controlling shareholders and the impact of pledge financing on corporate governance,studies the relationship among share pledge of controlling shareholders,tunneling and audit fees,to further understand about the influence path of controlling shareholders' share pledge.After observing prior relevant studies,we found that evidence of the controlling shareholders' equity pledge affects audit fees mostly from the aspects of audit risk and audit delay,there is little research on common agency problem between controlling shareholders and minority shareholders,hardly from the aspect of tunneling,this paper can supplement the subdivision field of the share pledge,which has certain theoretical value.According to the existing literatures,this article takes the listed companies' share pledge of controlling shareholders as the research object,combines the characteristics of audit fee model,and uses the degree of tunneling as the link,studies the influence of controlling shareholders' personal financing behavior on internal corporate governance and external auditor behavior of Listed Companies in China.Based on the current situation of Chinese capital market,combined with the auditor's response to the share pledge behavior of controlling shareholders,this paper has some innovation and practical value.Starting with the relationship among share pledge of controlling shareholders,tunneling and audit fees,we put forward the main hypothesis of this paper based on principal-agent theory,audit risk theory and insurance theory.Then,we select listed companies from 2008 to 2017 in Shanghai and Shenzhen Stock Exchange,multiple linear regression models were constructed based on the assumptions put forward by the three relationships,and empirical research was conducted on the assumptions put forward in this paper.It is found that the share pledge of controlling shareholders and audit fees are significantly positively correlated,that is,the higher degree of controlling shareholders' share pledge,the higher audit fees of listed companies;and the higher the proportion of share pledge,the higher the audit fees.The increase in audit fees is not only caused by the share pledge of controlling shareholders as a risk premium,but also includes the fees charged by auditors for inputting more time and energy.The above conclusion reflects the increase of audit fees and auditor input caused by the tunneling under the share pledge of controlling shareholders,and reveals the influence path among the three parts from shareholder behavior to auditor behavior.Combined with the above research conclusions,this paper puts forward some policy suggestions on the share pledge of controlling shareholders,tunneling and audit industry of listed companies in China.In terms of share pledge of controlling shareholders,we should optimize the allocation of resources to resolve the financing difficulties of high-quality listed companies in China,pay more attention to the share pledge of controlling shareholders,and reduce the relevant risks.In terms of preventing controlling shareholders from tunneling,we should standardize the disclosure of controlling shareholders' behaviors and improve the mechanism of safeguarding the rights of minority shareholders.In terms of auditing industry regulation,auditors are required to pay attention to the tunneling methods between controlling shareholders and listed companies,perform the audit supervision function,and restrain the private interests of accounting firms and auditors.