The Impact Of Government Audit On Cost Stickiness Of State-owned Enterprises And Economic Consequences

Government audit is one of the important supervision mechanisms of the National Audit Office for state-owned enterprises,and it is also the most in-depth and comprehensive audit type among all audits.The audit content includes not only the authenticity and legitimacy of the traditional financial revenue and expenditure audit,but also the economy and effectiveness of performance audit,and further extends to political responsibility,social responsibility and clean government responsibility.The high independence makes the government audit have a strong motivation to review and supervise the managers of stateowned enterprises.Auditors also have rich professional knowledge and strong information mining ability.They can find problems in the financial accounting and operation management of enterprises,and can comment on the operation of the company,put forward problems and governance suggestions,and supervise the rectification of enterprises by virtue of the identity of supervisors.Cost management is an important aspect of enterprise management.Government audit not only affects the cost management behavior of enterprises,but also further affects the maintenance and appreciation of state-owned enterprises.Specifically,the impact of government audit on the cost management of stateowned enterprises is related to the business risk of enterprises,and the effect on the resource allocation efficiency of state-owned listed companies affects the business performance and value of enterprises.Cost stickiness is an important research topic of financial accounting and management accounting.It can not only better reflect the enterprise’s consideration and choice of project maintenance decision-making when sales decline,but also an important supplement to the company’s operation efficiency and operation risk,and plays an important role in the enterprise’s operation performance.The high cost stickiness of state-owned enterprises may mean that the management deviates from the optimal resource allocation of enterprises in the economic sense.When the demand drops or the profit drops at the same level,the high adjustment cost and the management agency problem make the adjustment range of the cost smaller,and the excessive redundant cost cannot decline in proportion with the reduction of sales volume.The operating profit of the enterprise has fallen sharply,the operating risk has increased significantly,and the survival and development have been threatened.Therefore,exploring the impact of government audit on the Cost Stickiness of state-owned enterprises and its economic consequences is of great significance for improving enterprise operation efficiency,reducing operation risk and maintaining stateowned assets safe.Theoretical analysis shows that government audit can effectively restrict the business empire building behavior of management.Strengthen the effect of incentive mechanism by improving the quality of financial information and reducing the adverse impact of political connection.And improve the internal control system and improve the corporate governance level to reduce the agency cost of management,so as to reduce the Cost Stickiness of stateowned enterprises.Firstly,the double difference method is used to test the impact of government audit on the Cost Stickiness of state-owned enterprises.The empirical results show that after the implementation of government audit,the Cost Stickiness of audited stateowned enterprises holding listed companies is significantly reduced.This shows that government audit has a good impact on the efficiency of cost management,and affirms the supervision and governance function of government audit on the resource use efficiency of state-owned enterprises.At the same time,we test the endogeneity and find that the endogenous problem is not significant.All the above conclusions pass the robustness test.The test of frequent audit effect and lag effect shows that multiple audits of government audit can play a stronger governance role in the Cost Stickiness of state-owned enterprises,and the impact of each audit lasts for more than three years.Further testing the spillover effect of government audit,it is found that the Cost Stickiness of unaudited state-owned enterprises holding listed companies has not been significantly reduced,indicating that there is no spillover effect.Supported the policy that government audit should fully cover stateowned enterprises.The above research also supplements the literature on government audit to improve the cost management decision-making of state-owned enterprises.The reduction of Cost Stickiness of government audit may affect the capital appreciation of state-owned enterprises.This paper then discusses the impact of government audit on the maintenance and appreciation of state-owned capital from three aspects:business risk,business performance and enterprise value.It is further concluded that after the implementation of government audit,the operating risk of relevant listed companies will be significantly reduced,and the operating performance and enterprise value will be significantly improved.Then,using the sample data,a double difference model is established to test the impact of government audit on state-owned enterprises.The study found that after the implementation of government audit,the operating risks of the audited state-owned holding listed companies were significantly reduced,and the operating performance and value of the enterprises were significantly improved.This shows that government audit has a good impact on the maintenance and appreciation of state-owned capital.Further construct the comprehensive index of state-owned capital appreciation,and the empirical test shows that government audit promotes the obvious appreciation of state-owned capital.By analyzing and testing the robustness of the above conclusions,it is found that government audit has a robust impact on enterprise business risk,business performance,enterprise value and state-owned capital appreciation,which provides empirical support for the full coverage of government audit.This paper also empirically tests the influence channels of government audit on the maintenance and appreciation of state-owned capital.The empirical research finds that:(1)Cost stickiness is part of the intermediary of government audit to reduce business risks.Government audit reduces the cost stickiness,reduces the volatility of future earnings,improves the certainty of future earnings,and reduces the business risk of enterprises.(2)Cost stickiness is part of the intermediary mechanism for government audit to improve business performance.Government audit reduces the Cost Stickiness of listed companies,improves the timeliness of enterprise resource adjustment,enhances the response ability to sales,improves the efficiency of resource management and use,and improves the business performance of enterprises.(3)Cost stickiness is part of the intermediary of government audit to improve enterprise value.Government audit reduces the cost stickiness,improves the efficiency of resource allocation,and improves the value of enterprises.The reduction of enterprise operation risk can ensure the steady development of state-owned capital,the improvement of economic performance can promote the short-term income of state-owned capital,and the improvement of enterprise value can reasonably balance the long-term and short-term income of state-owned capital.Therefore,government audit reduces the Cost Stickiness of state-owned enterprises and promotes the stable,healthy and sustainable development of state-owned capital.Based on the theory of corporate governance,this paper studies the impact of government audit on Cost Stickiness and the value of state-owned capital.It is of great significance to deeply understand the interactive relationship between government behavior and economy at the micro level,and to explore how to play the role of the government to better realize the optimal allocation of resources and promote the preservation and appreciation of state-owned capital at the macro level.The innovations of this paper are:Firstly,this paper deeply discusses the impact of government audit on cost stickiness,and shows that external supervision from the government can effectively reduce the agency problem of management and improve the efficiency of cost management.This not only helps to deeply understand the interactive relationship between government behavior and economy at the micro level,but also has enlightenment significance for playing the role of government at the macro level to better realize the optimal allocation of resources.Secondly,this paper discusses the impact of government audit on enterprise business risk,business performance and enterprise value from the perspective of cost stickiness.It is found that government audit can significantly reduce the Cost Stickiness of enterprises,and the reduction of Cost Stickiness further reduces the business risk and improves the business performance and value of enterprises.This not only provides a new analysis channel for the impact of government audit on the operating risks of state-owned enterprises,enriches the literature related to cost stickiness,but also provides empirical evidence for the impact of government behavior on enterprise performance and value,affirms the supervision and governance role of government audit,and provides theoretical and data support for the full coverage of government audit to a certain extent.Thirdly,this paper theoretically analyzes the logic of government audit promoting the appreciation of state-owned capital from the perspective of cost stickiness.This paper proposes that reducing cost stickiness is an important way for government audit to promote the appreciation of state-owned capital.Previous studies on the preservation and appreciation of state-owned capital mostly focused on the logic of corporate governance,while abstracting or even ignoring the role of cost management.This paper makes up for this deficiency to a certain extent.