Environmental Uncertainty,Earnings Management And Audit Fees

Audit fees are an important economic link connecting accounting firms and audit clients.Generally speaking,the level of audit fees should fairly reflect the value of professional services provided by certified public accountants.Too high a fee will affect the independence of the auditor,making it impossible to correctly assess the risks of the audited unit,resulting in a decline in the quality of the audit report;too low a fee will weaken the enthusiasm of the auditor's work,limited audit resources,audit scope and audit time Insufficient,seriously affecting the quality of audit work.With the continuous improvement of relevant laws and standards in our country,the law enforcement of the supervision department has been strengthened,and more and more large firms have suffered lawsuits from investors who failed to invest in the audited unit.Under such circumstances,auditors can not only consider the value of audit assurance services when formulating audit fees,but should also take into account their own insurance value,especially in the current environment with a high degree of uncertainty.Therefore,the study of the relationship between environmental uncertainty and audit fees provides an opportunity to examine the effectiveness of the risk-oriented audit model and the theory of audit insurance.The written financial report after the audit is an important basis for external stakeholders to make decisions.Among them,the surplus information is the focus of their attention.However,the uncertainty of the external environment will increase earnings volatility,reduce corporate value,affect the management's salary and promotion,and then increase the management's motivation for earnings manipulation and reduce the reliability of earnings information.At the same time,environmental uncertainty has further increased the degree of information asymmetry between external stakeholders and management,and has made it possible for earnings management behavior.Earnings management distorts accounting information and reduces the quality of accounting information.While increasing the risks of the audit business itself,it also changes the level of potential risks faced by auditors.Of course,auditors will not allow their own risks to rise,they will definitely implement more audit procedures to reduce risks,or they will make higher audit risk premium decisions to deal with risks that cannot be reduced through their own efforts.So,whether environmental uncertainty will affect audit fees through earnings management is still lacking empirical data.This article first combs the relevant literature on environmental uncertainty,earnings management and audit fees,and puts forward three assumptions based on the analysis of related theories: First,environmental uncertainty is positively related to audit fees;second,Environmental uncertainty is positively related to earnings management;third,earnings management plays an intermediary role in the impact of environmental uncertainty on audit fees.Then,the data of Shanghai and Shenzhen A-share listed companies from 2012 to 2018 were used to empirically test the hypothesis.Finally,group by internal control quality to discuss the role of internal control in the path of environmental uncertainty affecting audit fees.The research results show that:(1)environmental uncertainty will significantly increase audit fees;(2)environmental uncertainty will significantly increase earnings management;(3)earnings management is an intermediary factor in which environmental uncertainty affects audit fees,and among them It plays a partial intermediary role;(4)The internal control governance mechanism can effectively alleviate the partial intermediary role of earnings management in the impact of environmental uncertainty on audit fees.Based on the research conclusions,this article puts forward countermeasures and suggestions for auditors,enterprises and external stakeholders,and provides decision-making references to stabilize the capital market and deal with environmental uncertainties.