The Impact Of Directors’ Audit Experience On Corporate Investment Behavior

The new development pattern of mutual promotion of domestic and international double cycles is a major strategic task related to the overall development of China proposed in the "14th Five-Year Plan".As the main body of the domestic economy,the development of the real economy is the lifeblood of the national economy,and it also affects the stability of the industry and the capital market.Enterprises are the main body of the national economy and innovation system.The maximization of the benefits of enterprises can promote the orderly and free flow of the economy,and it also determines whether the benefits of the main body of the domestic cycle can be best presented.However,in recent years,the inertia of capital market entities has gradually emerged.The wave of economic financialization has caused changes in the management and investment decisions of Chinese enterprises.At present,the growth of the real economy has slowed down,the operating efficiency of enterprises has gradually declined,and the profits of financial investment have continued to rise.More and more enterprises and investors want short-term and rapid capital appreciation.Business executives pay more attention to short-term interests and their own honors,so they often choose short-term and high-risk investment projects,which makes their investment performance less optimistic.The financial industry and the real economy have become more closely connected,which has promoted the cross-industry flow of talents.This has provided the real economy with professionals with different backgrounds,thus bringing different backgrounds to the corporate executive team.Since the senior executives of the enterprise are the decision makers and executors,these special personal backgrounds often affect the investment and financing decisions of the enterprise.The audit work is serious and cautious.Based on the "stigma theory",audit work experience will leave a cautious imprint on the workers who used to work in accounting firms.When they are faced with risky decisions,this imprint will show up and play a certain guiding role when they make decisions.When these people with audit work experience serve as decision makers in the company,their branding will be reflected in investment and financing decisions.Especially the directors of listed companies,they have the highest decision-making power of the company.When facing investment decisions,they have a different performance in investment decisions because of their special preference for risk.Based on this,this article uses a fixed-effect model to explore the impact of listed company directors’ audit experience on corporate investment activities,and specific general investment decisions into three directions: investment scale,investment diversification,and investment efficiency.Sort out this effect at a level.And in-depth analysis of the effect mechanism of the audit experience,and finally the adjustment effect is added to explore the adjustment effect of the blessing of professional certificates on the investment impact.This paper selects data from 2014 to 2019 from 3,040 listed companies in the Shanghai and Shenzhen A-share non-financial industry,and establishes a fixed effects model for regression analysis.It uses the proportion of directors with audit experience,the chairman of the board,and independent directors.Measure and support the audit experience of directors,and consider their impact on investment scale,investment diversification,and investment efficiency.Then introduce risk-bearing capacity as an intermediary variable to explore the mechanism of audit experience’s impact on investment.Finally,the blessing of the certificate is added to explore the adjustment effect of the certificate on investment.Research has concluded that the audit experience of directors of listed companies in China does have an impact on investment decisions.The main performance is: directors’ audit experience significantly reduces the scale of corporate investment,significantly improves investment efficiency,and is manifested in reducing the company’s overinvestment,but at the same time it will also deepen the degree of corporate underinvestment.Independent directors with auditing experience show the same direction of influence,but the chairman’s auditing work experience has little effect on investment efficiency.Furthermore,the main mechanism for directors with audit experience to influence investment is to change their risk-bearing ability and strengthen their risk-taking ability,that is,directors with audit experience have a more rational understanding of risks,thereby improving investment efficiency.The blessing of professional certificates has a corrective effect on the reduction of investment scale and the reduction of investment diversification.This conclusion confirms the scientific nature of the branding theory,enriches the related research on exploring the background of corporate executives and substituting audit factors into the corporate financial system,and promotes rational investment by enterprises,reduces the impact of agency problems,and improves corporate governance and The talent introduction policy is of great significance.