Research On The Equity Pledge And Financial Risk Of The Listed Private Companies In Jiangsu And Zhejiang From The Perspective Of Inquiry Letter And Social Audit

This paper selects the financial data of listed private companies in Jiangsu and Zhejiang in Shanghai and Shenzhen A-shares from 2015-2021 as a sample for the study.Based on the research perspective of the economic consequences of equity pledge,this paper analyzes the impact and path of equity pledge of controlling shareholders of private listed companies on corporate financial risk,and explores the inhibitory effect of stock exchange inquiry letter and social audit quality on the equity pledge and financial risk of controlling shareholders in the external governance mechanism.Based on the research of domestic and foreign literature,combined with the empirical model of intermediary effect,the intermediary mechanism of earnings management in the equity pledge of controlling shareholders and the financial risk of enterprises is further studied.At the same time,the two factors of stock exchange inquiry letter supervision and social audit quality in the external governance mechanism are introduced,combined with the empirical model of the adjustment effect,the adjustment mechanism between the equity pledge and financial risk of the controlling shareholders of private listed companies is studied,and finally the robustness and endogenous tests are carried out by replacing explanatory variables,moderating effect grouping regression and hierarchical regression analysis,Hausman test,PSM tendency score matching and other methods to increase the reliability of the research resultsFirstly,we introduce the research background and significance of this paper.Equity pledge is favored among private listed companies with large financing constraints because of its financing advantages such as few restrictions,short process and high amount,but its essence is a leveraged debt financing behavior,which will increase the financial risk of the enterprise.As a representative region for the development of private enterprises,the number and pledge ratio of equity pledged companies in Jiangsu and Zhejiang provinces have been increasing year on year in recent years,and the financial risks involved have been gradually increasing.With the gradual improvement of the inquiry letter system and social audit of the stock exchange in the external governance mechanism,it is of great significance to explore the role of both on the governance of enterprises.Through reading and tidying up relevant literature,this paper compares the research on the economic consequences of equity pledges,stock exchange enquiry letters and the effectiveness of social audit supervision,constructs a research framework,defines the connotation of equity pledges,financial risks,stock exchange enquiry letters and social audit quality,and elaborates on theories such as principal-agent theory,dynamic trade-off theory,reputation theory and risk-oriented audit theory.Based on the relevant literature and theories,as well as the relationship between equity pledge,financial risk,stock exchange enquiry letter and social audit quality of private listed companies,a logical deduction is made and a research hypothesis is proposed.Then,on the basis of determining the selected samples and variables,combining the measurement ideas of mediating effect and moderating effect,a multiple regression model is constructed,and software such as Stata.17 and Excel.2021 are used to verify the previous research hypotheses.The results of this study show that the pledge of equity of controlling shareholders increases the financial risk of private listed companies in Jiangsu and Zhejiang,and surplus management plays an intermediary role in it.The inquiry letter system of the stock exchange and the social audit quality have inhibited the triggering effect of the equity pledge of controlling shareholders on financial risks to varying degrees.In private listed companies with relatively weak internal governance,and with the increasing improvement and maturity of the external governance mechanism of China’s capital market,giving play to the supervision role of the stock exchange inquiry letter system and social audit on enterprises is of great significance to the financial risk prevention and supervision of private listed companies.Eventually,based on the above research conclusions,policy suggestions are brought up,such as continuously tracking the use of equity pledge funds,standardizing the disclosure of equity pledge information,accurately inquiring about financial report information and equity pledge business,and improving the high-quality audit services of auditors.