The Influence Of The Equity Pledge Of Major Shareholders On The Auditor

Equity pledge financing is convenient,it is very common among listed companies in China at present.After the large shareholder's equity pledge,because the use of the funds it obtains does not need to be disclosed,it tends to engage in accrual earnings management,real earnings management and other opportunistic behavior to stabilize the stock price,so the equity pledge is likely to become a means for the major shareholders to empty the listed company.Even if the large shareholders of listed companies to their shares of equity pledge financing is a personal financial act,but its motivation and behavior will bring a series of risks and negative impact on the listed company.In recent years,the risk of equity pledges has attracted the attention of external regulators,and auditors who carry out external oversight have also paid attention to the business.Whether the auditor will pay attention to the risk and influence of the large shareholder's equity pledge behavior when auditing the company's annual financial statements,and how the large shareholder's equity pledge behavior relates to the risks faced by the audit process,the audit opinion and the audit report?Therefore,the core research question of this paper is: how does the large shareholder's equity pledge affect the auditor?The existing research on the relationship between the equity pledge and audit of the majority shareholders is concluded mainly through empirical research.The existing research lacks the evidence of the actual case,so this paper will use the existing empirical conclusions to analyze and study through the specific cases.Based on the theoretical basis of shareholder's equity pledge,this paper analyzes the purpose of the large shareholder's equity pledge and the risks faced by the company after the equity pledge,and secondly analyzes the business risk and audit risk faced by the auditor because of the large shareholder's equity pledge of the audited unit,and finally introduces Lanfeng Biochemical as the specific case study object.Combined with the analysis of Several equity pledges of Lanfeng Biochemical and the audit opinions given by auditors.This paper takes Lanfeng Biochemical as an example to study the impact of the large shareholder's equity pledge on the auditor,in order to demonstrate the conclusion of the existing empirical research,which is also the innovation of this paper.Through the study of specific cases,it provides audit clues for the auditors of the subsequent large shareholder stakes,and reduces the audit risk,and reminds the companies of the same industry to pay attention to the impact of equity pledge,enlightens the small and medium-sized investors concerned about the audit report,and identifies the advantages and disadvantages of the large shareholder's equity pledge.