A Study On The Impact Of Media Negative Reporting On Audit Fees

The cost of audit has always been a hot issue in the field of finance.The earliest research on audit fees influence factors were confined two aspects of firm characteristics and firm characteristics,then gradually expand to the corporate governance and other risk factors.In recent years,the external regulatory environment has become the hot research direction of the subject of audit fees,empirical evidence has indicated that government regulation,laws and regulations will affect the behavior of auditors,and thus affect the audit fees.As an informal external environmental factor,whether the media has an impact on audit fees.Based on the mechanism of negative reporting on the media,this paper adopts the method of empirical research to study the A-share listed companies in Shanghai stock market in 2013-2015.At the same time,based on the study of the impact of negative media coverage on auditing fees,this paper makes a detailed report of the media negative reports,which is divided into negative reports of accounting and other negative reports,and its impact on audit fees.Negative reports on accounting refer to reports related to the financial statements and their notes,such as loss of the company,loss of assets,fraudulent financial statements,etc.Other negative reports refer to reports related to the company's management and other aspects,such as equity change,corporate governance and so on.The study found that:(1)Negative media coverage and audit fees were positively correlated,that media negative reports will enable auditors to raise audit fees.(2)Negative reporting on accounting will enable auditors to raise audit fees.(3)Other negative reports will also enable auditors to raise audit fees.(4)Negative media coverage is not the main factor affecting the audit fees.When the negative reports of the audited units are reported,the auditor will be aware of the risk and increase audit cost.Taking into account the role of the reputation mechanism and the incentive mechanism,the auditor will require a higher risk premium as compensation.At the same time,the negative impact of media coverage on audit fees is relatively small compared to the dominant factors such as firm size,business complexity,firm size and so on.In addition,in order to enrich the research results,this paper has carried out extended research,the study found:(1)The promotion on audit fees of accounting negative media coverage is stronger than other negative media coverage.(2)The "Big4" are more sensitive to the performance that "Negative media coverage will raise auditors' fees".(3)The negative reports of the previous period also contributed to the rise of current audit fees.Finally,in order to increase the reliability of the empirical results,this paper has carried on the robustness test to the research result.Changing the negative reporting method of the media,eliminating the samples without negative media reports and replacing the total audit fees with the domestic audit fees,the three test results are consistent with the main tests,which proved the correctness of the conclusions once again.