Research On The Relationship Between Unpaid Supervisors,Four Major Audits And Corporate Violations

China’s corporate governance system has absorbed the characteristics of the single-tier board of directors and the two-tier board of directors,and has formed a supervisory model in which the board of supervisors and independent directors jointly supervise corporate affairs.The board of supervisors system first appeared in the Company Law in 1993,and the powers of the board of supervisors have been gradually expanded over the past two decades.However,the supervisory work of the board of supervisors also revealed problems such as lack of independence,overlapping of functions with independent directors,and lack of supervisory power.There are some unpaid supervisors in listed companies.Their remuneration does not come directly from the company where they work,so they have a certain degree of economic independence.This independence helps these supervisors to perform their supervisory duties more independently.Experts and scholars at home and abroad have studied the relationship between the board of supervisors and corporate violations and have written articles to discuss the research results,but these scholars have different standards for sample selection and research methods.This paper takes supervisors whose salary income is not from the company they work for as the research object,takes the number of violations disclosed by the superior regulatory authorities in the same year as the frequency of corporate violations,and measures the severity of corporate violations by the type of punishment that the company receives for violations.First of all,the article will focus on the impact of the proportion of unpaid supervisors on the number of violations and the frequency of violations;secondly,from the perspective of external supervision,considering the impact of the audit firm selected by the enterprise,the impact of the proportion of unpaid supervisors on the selection of firms and their affairs The relationship between the audit and corporate violations,that is,whether the audit of the Big Four accounting firms played an intermediary role between unpaid supervisors and corporate violations;finally,considering the role of internal control,the samples were grouped according to the quality of internal control.The impact of unpaid supervisors on corporate violations under different internal control strengths is studied separately.Based on the above theoretical and practical background,this paper selects a sample of A-share listed companies from 2009 to 2019,conducts empirical research on independent supervisors and corporate violations,and draws the following conclusions:(1)The proportion of unpaid supervisors is significantly negatively correlated with corporate violations,the increase in the proportion of unpaid supervisors in the board of supervisors can effectively enhance the supervisory effect of the board of supervisors,which can not only reduce the frequency of corporate violations,but also reduce the severity of violations;(2)The increase in the proportion of unpaid supervisors promotes companies to choose more High-quality audit services increase the possibility of companies choosing the Big Four accounting firms to audit the company’s finances to assist in the supervision work;(3)The results of the mechanism test show that the acceptance of the Big Four audits is in the relationship between unpaid supervisors and corporate violations.Partially intermediary.The increase in the proportion of unpaid supervisors has positively pushed companies to use the Big Four accounting firms to audit their finances,and the Big Four audits can,to a certain extent,strengthen the supervision of companies and reduce corporate violations.(4)The inhibitory effect of unpaid supervisors on corporate violations and the intermediary role of the four major audits are more obvious in the sample group with weak internal control,and companies with weak internal control quality need more supervision by unpaid supervisors.