Parent And Subsidiary Business Distribution,Subsidiaries Diversification And Audit Fees

Audit fees have always been the focus of the audit field.Studies have shown that audit fees are directly dependent on the size of the business(assets and revenue scale),and how the distribution of the combined business under the parent-subsidiary structure affects audit fees is not of concern.In recent years,China's listed companies have shown a diversified development trend,mainly by increasing the way of equity investment in subsidiaries,and investing in multiple regions and multiple industries at the subsidiary level.In the case of a diversified business subsidiary company,whether there is a difference between the change in the overall audit cost of the listed company group level and the change in the audit fee caused by the diversified operation at the subsidiary level remains to be further tested.The core question of this paper is:How does the parent company s business layout(including structural distribution and subsidiary diversification)affect the audit fees?Based on the structural distribution of the parent company's business,this paper takes the proportion of the business undertaken by the listed company,the diversification of the distribution of the subsidiaries and the regions in the industry,and the interactions as the starting point,and studies the auditing fees of the listed company's internal business layout for the group as a whole.Impact.This paper starts from the theory of agency and the theory of risk dispersion with the theory of "deep pockets",and provides an explanation mechanism for the listed companies' diversified equity investment and audit fees.This paper takes the 2008-2016 A-share listed company(excluding the financial industry)as the research object,and uses the revised OLS regression to empirically test the relationship between the business distribution between the parent and subsidiary companies,the diversification of the subsidiaries and the audit fees.The conclusions of this paper are as follows:(1)The higher the proportion of listed companies' overall business distribution in subsidiaries,the higher the audit fees of the entire group;(2)The higher the proportion of listed companies' overall business distribution in subsidiaries,The diversification of the company's industry has increased,and the overall audit fees of the Group have increased;(3)The proportion of listed companies' overall business distribution in subsidiaries has increased.As the geographical diversification of subsidiaries has increased,the overall audit fees of the Group have increased.The innovations and contributions of this paper mainly include the following three points:(1)In the context of the subsidiary company of the listed company's business,this paper attempts to open the black box of the parent-subsidiary structure,and study the organizational structure and business layout of the parent-subsidiary based on the perspective of the distribution of the parent-subsidiary structure.The impact of audit fees provides a mechanism for the impact of the distribution of business between parent and subsidiary companies;(2)Studying the distribution structure of parent-subsidiary business,the diversification of subsidiaries and audit fees from the perspective of audit fees,and providing audit pricing for accounting firms in China Some empirical evidence;(3)From the perspective of the internal structure differences between listed companies and subsidiaries,examine the impact of diversified equity investments on audit fees,and enrich and develop relevant research literature on the influencing factors of audit fees.