The Empirical Research On The Impact Of Different Types Of Institutional Investor Holding On The Audit Quality Of Listed Companies

After the separation of ownership and management,the benefits of investors and the reasonable degree of resources' allocation in the stock market largely depends on the authenticity of information disclosure in the securities market.The certified public accountants certificate the financial information of listed companies through audit work,to help the investors to increase the effectiveness of investors' decision-making.However,frequently occur of financial fraud cases making the investors break faith with certified public accountants,the prestige of the audit work frequently encounter challenges,improve the quality of audit work become a focus what stakeholders in the securities market concerns about.As a kind of restricting power,institutional investors may have important effects on audit quality.So,whether the addition of institutional investors can improve audit quality of listed companies? Can different categories of institutional investors play a different role to upgrade the audit quality? Whether institutional investors' join can enhance investor's investment confidence,stable capital market and promote the rational operation of capital? These questions are the core content of this study,has important theoretical and practical significance.After carding the current situation of institutional investor and audit quality in the market,on the basis of previous studies,this paper uses the principal-agent theory,signal transmission theory and game theory of the institutional economics to analyze the inner mechanism of the institutional investors holding affect audit quality;then uses the TOP4 to measure the audit quality,divides institutional investors into stable type and transaction type accordance with the longitudinal time dimension and horizontal industry dimension,at the same time controls for other factors affecting the audit quality,like equity concentration,audit opinion and so on;then this paper selects the listed companies come from Shanghai stock exchange and Shenzhen stock exchange from 2007 to 2015 as the research sample,studies the overall institutional investors holding and different categories of institutional investors holding's influence on audit quality respectively through the logit regression;finally,this paper uses the audit fee as the substitution variable of audit quality for robustness test through OLS method.Through studies,this paper draw the following conclusions: firstly,the overall institutional investors holding's increase will promote the company's audit quality.This is because due to their own professional advantage,institutional investors will be easier to detect the audit quality problem than ordinary investors.When the proportion of institutional investors' shareholding is low,they can stop loss by selling the stock,but when the proportion is higher,the cost of selling is far greater than actively participating in corporate governance,so the institutional investors have a reason to choose higher audit quality.Secondly,relative to the transactional institutional investors,stable institutional investors will have higher demands on audit quality.Stable institutional investors' investment income comes from the company's dividends,this prompted stable institutional investors' interests in the company's steadily growing in the long-term operation,prefer to maintain the company's market reputation,so they pursue higher audit quality.But transactional institutional investor just interest in realizing short-term profits,and don't have enough energy and time to oversee the operation of the company,so their demands for audit quality is low.This first chapter expound the realistic background,theoretical and practical significance,method and framework of the paper,namely it introduction;the second chapter sort and review three aspects of literature including audit quality,institutional investors as well as the relationship between audit quality and institutional investors holding;the third chapter carries on the definition of institutional investors and audit quality firstly,then analyzes the theoretical foundation of institutional investors holding affect audit quality using the principal-agent theory,signal transmission theory and game theory of the institutional economics and put forward the research hypothesis,this chapter introduces the theoretical basis of the analysis of full text;the fourth chapter is empirical research design,this part illustrates the sample selection and data source in the process of empirical research,and definite the variables involved in research in detail,and set a model for the institute;the fifth chapter is the empirical result analysis,using the logit model to regress the company's data come from the Shanghai stock exchange and Shenzhen stock exchange from 2007 to 2015,refer to descriptive statistics analysis and so on,and conduct the robustness test on the basis of substitution variables;the sixth chapter summarizes the conclusion of this article research,gives the appropriate policy recommendations,and expounds the defects of this study.