Emprical Study On Auditor Choice In IPO Market Based On Signaling Theory

October the 23rd, second board was set up formally in SHENZHEN stock exchange. Because of Small Medium high tech Enterprises generally have some features such as outstanding achievement instability,high operating risk, high delist risk etc, and domestic main board market refused permission to enter owing to their sill high, so we especially need a second board market which is different of main board market offers financing channels for them.Because the besiness of the second board company is in pioneering stage and the external investors are hard to find related date to understand, the question of information asymmetry between the IPO company of second board and the external investor is serious,these companies have strong intention to transmit the signal of the companies'private information to the potential investors, in order to attract much more funds.When the company is first listed,according to the provision to announce the company's situation, in order to conquer the information asymmetry, the IPO company will transmit every signals to the market so as to transmit private information about company's truthful value to the external investors, by means of auditor's choice to transmit the signal to the investors is one kind of them. The west scholars have done many researches about different theoretical principle for IPO market auditor's choice, but these researches in China is less, in order to research at the background of the huge difference between Chinese and Western law circumstances and the development degree securities business, and the research which is fit for the western auditors'choice based on the signal theory is still established or not, this article will analyze and verify the auditors'choice from 5 angles, as follows:finder's fame, the interest concentration ratio of IPO company, IPO predecessor company's scope, company's indebted standard and IPO company especially risk factor.This article is based on the Logistic regression model of Simunic & Stein and Clarkson & Simunic, choose 2009-2010 153 second boards IPO company from SHENZHEN stock exchange as sample, add and expand related decument about based on the signal theory the auditor's choice of IPO company, inspect the applicability about auditor's choice of the signal transmit theory in second board market, and expected to direct at laboratory result, offering corresponding suggestion.Under sample regression analysis,this article found: between the scope of IPO company former assets and whether to choose high-quality auditor exist positive correlation relation observably; between company especial risk factor and whether to choose high-quality auditor exist negative correlation relation observably; between interest concentration ratio and whether to choose high-quality auditor exist negative correlation relation observably; between finder's fame and auditor's quality have no necessary connection; between indebted standard and whether to choose high-quality auditor exist positive correlation relation, but indistinctively. Laboratory result indicate:intention of China second board listed companies which offer audit service to the potential investors by engage high-quality office in order to transmit signal of the company quality is not powerful. But, the author account as researching Chinese IPO market auditor choice action has many positive significance in following sides, such as:complete audit marcket's law and statute; set up perfect accounting postulates, insistently carry out the strategy of run business big and strong and complete the administration structure of listed companies.This article comprises 5 sections, the definite frame construction as follows:The first section:The introduction introduces research background as well as purpose, research considerations, research frame as well as content of arrengement, innovation point of textual.The second section:Document summarize analyzes and discusses the document summarize about signal transmission theory and auditor's choice of IPO company from different visual angle of Chinese and western. And do hackling by the numbers for former scholastic research.The third section:The theory analysis and the research hypothesis contain 4 sections:theory analysis,research hypothesis,configuration of sample and origin of date,pattern layout and variable declaration.The forth section:Empirical study result and analysis contain descriptive statistics result,nonparametric test, correlation analysis, regression result and analysis, genetic analysis without result of inspect and verify as well as sensitivity analysis.The fifth section:Conclusions and recommendations introduce textual inspect and verify conclusion at first, then bring out policy and suggestion, and make known textual novelty,limitations as well as outlook of follow-up study.Uppermost innovative point of this article: At first, this article tread on the heels of Chinese securities business'development step, adopt the modus of experimentalize, choose 153 listed companies as sample which GEM from open the market to end of 2010, be based upon signal transmission theory visual angle research auditor's choice, add GEM to this area, which is domestic study initiation.