Research On The Impact Of Corporate Financialization On Audit Investment

At present,China’s economy is developing rapidly,and while putting forward highquality development as the primary task,it is also facing problems such as the slowdown of real economic growth.In this context,more and more enterprises are trying to obtain high returns by allocating financial assets,that is,enterprises generally show a trend of financialization.As a third-party independent institution,auditors can supervise the financialization of enterprises and avoid excessive financialization of enterprises.Studies have shown that high audit quality is premised on adequate audit investment.Audit input mainly includes the audit procedures and audit resources invested by auditors in order to issue appropriate audit opinions in their work.It is generally believed that audit input may be related to the risks of the audited entity identified by the auditor.Since corporate financialization increases operational risks,will auditor’s audit investment decisions be affected? Therefore,it is useful to explore the factors that influence audit input.Starting from the correlation between corporate financialization and audit input,this paper also discusses the mechanism of the relationship between enterprise financialization and audit input of auditors,focusing on the following research:(1)The relationship between enterprise financialization and audit input?(2)What are the channels through which corporate financialization affects audit investment?(3)What factors affect the relationship between enterprise financialization and audit investment?In this context,this paper intends to use the data of China’s A-share market from 2010 to 2020 to study how corporate financialization affects the audit investment of accounting firms and analyze its mechanism.It is found that the allocation of financial assets by enterprises leads auditors to invest more audit procedures and audit resources.Further examination shows that enterprise risk plays a conductive role in the relationship between the two;In addition,higher analyst attention and high-quality information disclosure can effectively inhibit the effect of financialization on audit investment.After defining the maturity date of different financial assets and the size of the firm,it is found that long-term financial assets or non-international "Big Four" will prompt auditors to increase audit investment.Based on the above conclusions,this paper also adopts a variety of robustness analysis methods,and the conclusions still have a certain degree of credibility.The research goal of this paper is to rationally allocate funds for financialized companies to reduce operational risks,so that they can provide accounting information in line with their own reality according to their own development conditions,help enterprises develop smoothly,and put forward relevant suggestions according to the research conclusions.This paper mainly makes suggestions from the government,enterprise and audit levels,first,the government should increase the support of entity enterprises,guide enterprises to allocate financial assets reasonably,and strengthen the supervision of enterprises’ allocation of financial assets;Second,enterprises should clarify the motivation for financialization,adjust the structure of financial asset allocation,and strengthen management training;Third,auditors should pay full attention to the role of financialization in the audit process and continuously improve their business level.This paper makes innovations on the following issues: First,further expand and improve the economic consequences of corporate financialization.At present,many scholars have conducted research on corporate financialization,mainly focusing on the relationship between corporate financialization and business performance and R&D decision-making,and there is little research on the relationship between corporate financialization and the audit market.This paper studies the financialization of enterprises from the perspective of audit investment,and expands the scope of research on its economic consequences.Second,it provides a certain reference for accounting firms to make reasonable audit investment decisions.According to the research results of this paper,the higher the degree of financialization of enterprises,the more audit procedures and resources auditors need to invest,and the research results will help auditors understand the financial risks of enterprises,so as to provide a basis for auditors to make correct audit decisions.