Study On The Relationship Between The Actual Controller's Right Of Residence Abroad And The Auditor Selection

Private enterprises are an important force to promote the development of China's national economy after the reform and opening up.At the same time,China is experiencing the third wave of overseas emigration,which is dominated by private entrepreneurs.Many studies have found that the actual controller can infringe and transfer the company's interests in accordance with its control right,and turn the profits of the minority shareholders into the private profits of the actual controller.When the actual controller of a private enterprise has the right of residence abroad,it will boldly carry out asset transfers,financial fraud,capital occupation,and tax avoidance,which will have a negative impact on the value of the company.The "right of residence abroad" provides a stable place for the asset controller to import assets,and at the same time can avoid legal risks and escape domestic sanctions.Therefore,its exploitation of interests is likely to be more serious and affect the stable development of listed companies.It can be seen that the right of overseas residence held by the actual controller further increases the second type of agency costs between the actual controller and the small and medium shareholders,exacerbating the information asymmetry,need to introduce a third party mechanism The actual controller of the right.And independent audit as an effective governance mechanism for external supervision,especially high-quality auditors can effectively alleviate agency conflicts and regulate conflicts of interest.Hiring a high-quality auditor can also use its reputation mechanism to send positive signals to the outside world,indicating that there are no problems in the production and operation of the enterprise,and distinguishing it from low-quality enterprises.Based on the information asymmetry theory,principal-agent theory and the theory of signal transmission,the actual control of overseas residence as the breakthrough point,using the data from 2010-2018,the private listed companies controlled by manual approach to collect the actual data,have foreign residency over the following three problems studied our country privately operated enterprise actual controllers have a residence outside the territory of the people's economic impact:first,the actual controllers have foreign residency and the relationship between the auditor choice;Secondly,how does the difference of legal environment affect the relationship between the overseas residence right and auditor selection of the actual controller? Thirdly,how does the difference of capital occupation affect the relationship between the actual controller's overseas residence right and auditor selection?Fourth,the audit fees paid by such enterprises for the quality of the audit services they receive.The empirical results show that under the condition of the other condition is constant,the actual controllers residency with foreign enterprises tend to choose high quality auditors further,this paper studies the private enterprise the legal environment of the region and the capital takes up level will have residency abroad and the actual controllers respectively the relationship between the auditor choice of regulating effect,the empirical results confirmed that when the actual control of enterprise from foreign residence,and the business is more developed regions in the legal environment,outside the residence and the relationship between the auditor choice more prominent;When enterprise's capital takes up level is higher,the agency conflict,the more serious when,actual controllers residency with foreign enterprises need more high quality external audit services come into play at the end of the paper also study found that the actual controllers residency with foreign enterprises to reduce the agency cost to hire high quality auditors,paid a higher audit fee.The conclusions of this paper not only expand the scholars' research on the economic consequences of the actual controller immigration in China,but also enrich the relevant literature on the factors affecting auditor selection.