Study On The Relationship Between Excessive Financialization And Auditor Selection

In recent years,China’s economy has entered the new normal,the real economy has begun to weaken,and the financial industry has expanded rapidly.Entity enterprises have gradually divorced from their traditional production and operation methods.Through excessive allocation of financial assets,they increasingly rely on obtaining profits from the financial and real estate industries,forming an excessive financial economic phenomenon,which has aroused the close attention of the party and the government.The report of the 19th CPC National Congress pointed out that to build a modern economic system,we must focus on the real economy.Therefore,more and more scholars begin to study the excessive financialization of enterprises.For enterprises,as an external supervision organization,independent audit can alleviate the agency cost of enterprises and improve the quality of information disclosure.It is the link between enterprises and capital market.When the enterprise appears the trend of excessive financial ization,the excessive allocation of financial assets not only affects the business risk and financial risk faced by the enterprise,but also affects the audit risk of the statement.Then,will the enterprise choose to hire high-quality auditors to deliver more reliable information to the capital market in order to obtain better signal transmission effect or alleviate the agency problem of the enterprise;From the perspective of rent-seeking,in order to avoid high-quality supervision and achieve the purpose of receiving unqualified opinions,we will choose low-quality auditors who are easier to "cooperate".There is no unified conclusion in the academic circles,which is worthy of further analysis and discussion.Based on this,this paper adopts theoretical and empirical research methods to verify the relationship between the two.In addition,considering the internal and external economic environment of enterprises,this paper selects property rights and institutional investors’shareholding as moderating variables to explore the influence of different factors on the relationship between excessive financialization of enterprises and auditor selection.In the theoretical analysis,this paper firstly defines the concepts related to excessive financialization and auditor selection,and then puts forward relevant research hypotheses by integrating signal transmission theory,rent-seeking theory,audit risk theory and entrust-agent theory.In the empirical test,this paper selects the data of non-financial and real estate listed companies in Shanghai and Shenzhen stock markets from 2015 to 2020,and carries out descriptive statistics,correlation analysis,multiple regression analysis and robustness test by constructing multiple regression analysis model.The results show that:(1)there is a negative correlation between excessive financialization and auditor selection,that is,the existence of excessive financialization encourages firms to choose low quality auditors;(2)Considering the nature of property rights,the nature of property rights strengthens the choice of low-quality auditors for excessive financialization of enterprises;(3)Overall institutional investors have no influence on the relationship between excessive financialization and auditor selection;(4)After the heterogeneity of institutional investors is divided,stable institutional investors can restrain the excessive financialization of enterprises from selecting low-quality auditors.Based on the above analysis,this paper creatively links the excessive financialization of enterprises with the choice of auditors,explores the relationship between them,introduces two regulatory variables:the nature of property rights and the shareholding of institutional investors,and constructs a relatively complete research framework.On the one hand,it broadens the research perspective of the corresponding academic literature.On the other hand,it also puts forward suggestions for enterprises to reasonably allocate financial assets,improve corporate governance and auditors’ independence;It provides some policy enlightenment for regulators to strengthen financial supervision from the perspective of audit.