Regional Corruption, Business Risk And Audit Fee

Since the 18 th CPC National Congress,China has carried out various actions to crack down on corruption and made significant progress.The microscopic main body,enterprises as market activities will inevitably influenced by the area of official corruption,could increase the risk of the enterprise business activities,and audit as a kind of external form of independent third party supervision,the audit pricing in the part of the charge is for enterprises to carry out risk assessment and determine the audit risk premium.Based on the above micro-logic,this paper tries to verify the following questions through empirical evidence and case studies: What is the impact of regional corruption degree on enterprise audit fees? Is business risk an intermediary channel for the influence of the former on the latter? This study is of great significance for improving the audit quality and perfecting the market system of audit pricing.This paper adopts the method of combining empirical research and case study to solve the above problems.First of all,based on the micro-data of A-share listed companies in Shanghai and Shenzhen from 2015 to 2019 and panel data of regional corruption cases,this paper constructs an econometric regression model to investigate the influence of regional corruption on enterprise audit costs and its channels,and then selects Jinbei Automobile Company as A case.It further analyzes the influence of corruption in Liaoning province on the audit cost and its mechanism.In this paper,the study found that: corruption and nonlinear relationship between the audit fee U corruption when area is lesser,to raise the level of corruption as the region shows the tendency of lower audit fees,and when corruption in more than a certain threshold value,with the improvement of corruption level,audit fees are rising trend.The mediating mechanism test shows that business risk plays a part mediating role in the relationship between regional corruption and audit cost.Regional corruption has a U-shaped effect on business risk,and business risk has a positive effect on audit cost.Further case studies found that corruption in Liaoning province numerical located right on the u-bend critical point,and corruption,jinbei automobile business in Liaoning province line chart change trend of risk and audit fees for the direction of change,so the Liaoning province corruption on jinbei automobile management risk and the influence of audit fees follows a u-shaped curve on the right side of the change rule,That is,corruption in Liaoning province,jinbei Automobile operation risk and audit cost change in the same direction.Finally,based on the above research conclusions,this paper puts forward relevant policy recommendations on corruption governance,enterprise risk management and audit risk identification.