The Impact Of Supply Chain Shared Auditors On Earnings Management

On January 1,2013,China revised the information disclosure content and format standards of listed companies,which stipulated that the main board and GEM companies should disclose the information and proportion of major suppliers and customers,and the securities regulatory authorities gradually strengthened the disclosure of supply chain information of listed companies.Further research on supply chain relations also has the possibility of in-depth research due to the promulgation of the guidelines.Economic globalization leads to increased concentration of supply chain,in order to guarantee the stability of the business supply chain gradually clear,and for a single enterprise financial management and accounting information quality influence involved in the field of audit,the audit service is not only for individual companies or business,but a few enterprises to form organic whole.At present,both types of earnings management are more common,and there are many ways of reviewing accrual earnings management.However,since the supervision of real earnings management involves real changes in transaction cash flow,there are certain difficulties.How to strengthen the supervision of real earnings management?Review is also the focus of current audit work.Supply chain shared auditors can increase the amount of information through information sharing.When disclosing the annual report of the previous year,they will often announce the renewal of the firm,and the company will also know the firm of the current year in advance.The existence of the shared auditor may affect management.Layers create a deterrent effect.Due to the strengthening of supply chain relationships,the flow of information on the supply chain has increased,and research on supply chains has received attention.Previous studies have involved shared auditors within a group and shared auditors among competitors in the same industry.Information exchange within a group is usually more convenient,which will weaken the role of shared auditors to a certain extent,and shared auditors among competitors.Auditors may have the problem of business information leakage,so the sample size for the selection of shared auditors in the competitive relationship is small.However,this paper studies the shared auditors among the cooperative relationships in the supply chain.Does this behavior have a positive effect on the accounting information governance of the supply chain?To this end,this thesis takes China’s A-share non-financial listed companies from 2007 to 2019 as a research sample,and manually matches the auditor information of the top five suppliers or customers.From the perspective of supply chain,it is studied whether the choice of shared auditors increases the deterrent effect on management and reduces the level of earnings management.The research shows that the supply chain shared auditor has an inhibitory effect on the real earnings management of the audited unit,but the inhibitory effect on the accrual earnings management is not significant.Among supply chain types,sharing auditors with clients significantly inhibited both types of earnings management.If the auditor has industry expertise,it means that it is more conducive to review the real earnings management of the audited unit,increase the deterrent effect on the management,and further enhance the inhibition effect on the real earnings management level of the audited unit.As supply chain concentration increases,the deterrent effect of shared auditors is weakened by increased reliance or dedicated investment.This research has the following contributions:(1)Explore a new way to reduce the real earnings management behavior of enterprises-supply chain shared auditors.This paper focuses on the sharing of auditors between upstream and downstream enterprises in the supply chain,which is conducive to the establishment of information communication channels for auditors and puts more pressure on the management.Combined with the analysis of the fraud triangle theory,it inhibits the motivation,opportunities and rationalization paths of enterprises for earnings management.(2)Sharing auditors with clients can more restrain the two types of earnings management behaviors of enterprises,and enterprises may consider tending to share auditors with clients.(3)It is tested that auditors have industry expertise,which will enhance the inhibitory effect of shared auditors on real earnings management;the higher the concentration of the supply chain,the weaker the inhibitory effect of shared auditors on real earnings management.According to the three common methods of real earnings management,the classification research is carried out,and the research of this paper is deepened.