Environmental Uncertainty,Negative Media Reports And Audit Quality

The effect of media supervision has always been a hot issue in the field of journalism and communication,which plays a special role in the capital market.Through the foreshadowing effect of the agenda setting theory of the important issue,it can influence the public's psychological cognition and behavior,which plays an important mediating role in information asymmetry and transparency of information.In recent years,with the great changing way of information dissemination,media supervision is regarded as the intangible regulatory power outside the legal system,played an indelible role in corporate governance,while significantly reducing system risks and helping to build more sophisticated capital market.For a long time,the quality of auditing has always been one of the important topics of auditing academia.High-quality audit report is an important reference information for investors' rational investment and effective supervision of supervisory departments.Therefore,the quality of audit quality is stable and stable operation of capital market Has a vital impact.Relevant literature research shows that the media supervision mechanism will have different degrees of public opinion on the auditors,auditors in providing customers with low-quality audit audit services,will damage their reputation,coupled with the external media agenda to add fuel to the flames,Eventually may be subject to litigation risk and loss of more customers.In order to avoid the audit risk,the auditor may be based on the customer's media negative reports,combined with the degree of prominence of the agenda and the information agenda of the bedding,and thus pay more attention to customer financial reporting there is a possibility of material misstatement,increase the audit process to improve the audit quality.Moreover,the media supervision function depends not only on its own reporting behavior,but also with its environment has a very close relationship.Environmental uncertainty will aggravate the uncertainty of operating information and enhance the motivations of managers' opportunistic behavior.Based on different litigation risks,there will be different degrees of real risk,which will affect the possibility of such a realization.behavior.On the one hand,the improvement of environmental uncertainty will lead to the enterprise management and control system more inclined to through the decentralization to stimulate the enthusiasm of employees,thereby increasing the internal and external business-related information asymmetry,so that managers of earnings management Motivations are stronger,and when environmental uncertainty is large,companies are more under pressure to meet their financial goals and are more likely to recognize future earnings in the future.On the other hand,the increase in environmental uncertainty will lead to the company's future business performance fluctuations in the performance-oriented pay structure background,the manager will be through a certain degree of earnings management behavior to reduce this volatility.At this point,in the case of a certain level of media supervision,may produce more negative reports,which further affect the quality of the audit.Based on the principal-agent theory and the agenda-setting theory,this paper has found that the media supervision has certain governance effect according to the relevant literatures,and there is a certain correlation between the negative reports and the quality of the media.Negative reporting will encourage CPAs to provide higher audit quality.Because of the environmental uncertainty will have a certain impact on the behavior of certified public accountants,so on this basis,adding the environmental uncertainty of this variable for further study.In the empirical research,this paper puts forward the hypothesis of this paper,the establishment of environmental uncertainty to the media negative reports and then to the audit quality of the indirect effect of the logical structure of the chain,thus forming the theoretical framework.This paper chooses 2009-2013 to remove the financial industry and all the A shares of ST as a sample.Determine the company's environmental uncertainty(EU)by adjusting the standard deviation of sales income over the past five years by industry-adjusted companies.By setting up an ordinary least squares model,the estimated non-normal sales income over the past five years is used to quantify environmental uncertainties;And from the "China's important newspaper economic database" to select the capital market with the highest degree of concern in the four major securities newspaper hand-collected A-share listed companies are positive and negative reports and media reports to measure the total amount of negative reports;The quality is obtained by modifying the Jones model by sub-industry and annual regression,and then extracting the coefficients into the formula.And then use Stata14 to describe the values and correlations of each variable,and to establish the multiple regression model and the multiple regression analysis with crossings to verify the proposed hypothesis.In this paper,through the normative analysis and empirical analysis,the negative reports of the media will have a certain effect on the auditor to improve the quality of the audit,and the environmental uncertainty will make this effect more obvious.In addition,we will use the natural logarithm of audit fees to replace the audit quality and then carry out the robustness test,and find the conclusion.Finally,some relevant thinking and practical suggestions on improving the quality of the audit are put forward.