Party Organization Governance,Management Power And Audit Fees

Compared with the corporate governance models of other countries,the corporate governance of state-owned enterprises in my country has a very important feature-party organizations participate in corporate governance.Party organizations mainly participate in company management and governance decisions through "two-way entry and cross-service".The "Decisions of the Central Committee of the Communist Party of China on Several Major Issues Concerning the Reform and Development of State-owned Enterprises" adopted by the Fourth Plenary Session of the 15 th Central Committee formally proposed a leadership system of "two-way entry and cross-appointment".As an important economic supervision mechanism,the ultimate goal of auditing is to provide stakeholders with relevant and reliable information,so as to reduce the information asymmetry among stakeholders and reduce the company’s agency costs to a certain extent.The more serious the agency conflict,the stronger the client’s willingness and motivation to reduce the company’s agency costs,and the higher the demand for external high-quality audits.High-quality auditing requires auditors to use their professional competence and professional judgment,make more efforts,invest more audit man-hours and audit costs,and therefore charge more audit fees.The problem of principal-agent conflicts in state-owned enterprises in my country is serious.The party organization’s participation in corporate governance,the most important feature of the corporate governance of state-owned enterprises in my country,can to a certain extent solve the agency problem caused by insider control in state-owned enterprises in China.The power of management is a very important indicator that reflects the corporate governance environment of listed companies.Under different management powers,there may be significant differences in the effectiveness of party organization governance.The article uses A-share state-owned listed companies from 2014 to 2019 as a research sample to empirically test the relationship between party organization governance,management power and audit fees.The study found that there is a negative correlation between party organization governance and audit fees,and this conclusion is valid when the party organization participates in governance through "two-way entry" and "cross-service",but there is no significant correlation between party organizations’ participation in the governance of the board of supervisors and audit fees.In addition,in the case of "two-way entry" and "cross-service",management power will inhibit the negative relationship between party organization governance and audit fees.In the scalability test,this paper conducts a group test on the sample data according to the institutional background and the level of state-owned enterprises.The results found that:after the core position of leadership in the governance of state-owned enterprises is emphasized,the governance effect of the party organization is more significant;compared with local state-owned enterprises,the governance effect of the party organization in the central state-owned enterprises is more obvious,and the management power in the central enterprises The inhibitory effect on the governance effect of the party organization is not significant.