Leverage Manipulation Of Listed Companies And Audit Fees

In order to solve the potential systemic risks which China’s economy faces in the process of developing,deleveraging has been an important direction of macro-economic control of China in recent years.The continuously high enterprise leverage ratio is an important reason for high macro-economic leverage ratio in our country,so it’s essential for the work of deleveraging to reduce enterprise leverage ratio.When enterprises face pressure to deleverage from policies and regulations,in addition to substantially increasing equity financing and reducing the debt level,the enterprises may also manipulate the leverage condition through offbalance sheet liabilities and debt in name of equity to reduce the book leverage ratio.This kind of behavior will undoubtedly hinder the implementation of China’s deleveraging policy and effective management of systemic risks.And this finally affect the high-quality development of China’s economy.As the gatekeeper of the capital market,external audit plays an important role in improving the quality of information disclosure of listed companies and maintaining the order of capital market.Therefore,this paper mainly discusses the influence of leverage manipulation on audit fees of accounting firms.This paper takes the data of Chinese A-share listed companies from 2008 to 2021 as research samples.After forming theoretical derivation and proposing research hypotheses on the basis of sorting out and concluding existing research results,this paper verifies the hypotheses through empirical research.The results show that:(1)Leverage manipulation of listed companies will lead to the increase of level of audit fees;(2)The growth of enterprises plays a positive moderating role in the process of leverage manipulation affecting audit fees;(3)The implementation of our deleveraging policy has an obvious policy impact on the influence of leverage manipulation on audit fees;(4)The leverage manipulation behavior of listed companies affects the audit input of certified public accountants,and then affects the audit fee level;(5)Compared with low-R&D-investing,low-financing-constrainted,state-owned enterprises and non-actively deleveraging enterprises,the influence of leverage manipulation on audit fees is more obvious in high-R&D-investing,high-financing-constrainted,non-stateowned enterprises and non-actively deleveraging enterprises.Based on the above findings,this paper puts forward the following policy recommendations:(1)Enterprises should comply the policy guidance,actively reduce their own debt level and consciously stop leverage manipulation behaviors;(2)For accounting firms,they should implement and improve the audit business model oriented by risk assessment and effectively improve the quality of practice;(3)For the regulators,it is necessary to further improve our accounting standards and complete the supporting work of supervision and verification in the process of implementing the policy of deleveraging.Based on the background of deleveraging in China,this paper studies the impact of corporate leverage manipulation on accounting firms’ pricing decisions from the perspective of market intermediaries,and enriching the relevant research on the economic consequences of leverage manipulation and the influencing factors of audit fees.Combined with the means and influence of enterprise leverage manipulation behavior,this paper clarifies the specific path that enterprise’s leverage manipulation affects audit fees.At the same time this paper has certain practical significance.