Open AccessControlling Shareholder’s Share Pledge, Earnings Management and Audit Decision—Based on Regression Method in Statistics
Author(s) -
Minshu Zhao,
Fangying Yuan
Publication year - 2020
Publication title -
journal of physics. conference series
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.21
H-Index - 85
eISSN - 1742-6596
pISSN - 1742-6588
DOI - 10.1088/1742-6596/1616/1/012045
Subject(s) - pledge , business , accounting , equity (law) , audit , shareholder , earnings management , earnings , finance , corporate governance , political science , law
This article uses 2009-2019 Shanghai and Shenzhen A-share listed companies as a sample to study the impact of listed companies’ equity pledge behaviour on auditors’ decision-making. The empirical results show that if there is a pledge of large shareholder equity, the audit pricing will be higher than when it does not exist. At the same time, the greater the proportion of pledged equity is, the higher the audit pricing accordingly is. The study finds that the equity pledge behaviour would make auditors more likely to issue non-standard audit opinions. The state-owned nature has a positive regulating effect on the relationship between equity pledge and audit opinion. But it has a negative regulating effect on the relationship between equity pledge and audit pricing. In the study of the mechanism of action, it is found that the equity pledge affects the auditor’s decision-making by affecting the level of earnings management. The research in this article provides a reference for listed companies, auditor firms and regulatory authorities.