Enterprise Digitalization And Auditor Selection

As the modern society gradually enters the digital era,digital technology represented by artificial intelligence and big data will lead enterprises to carry out industrial integration,change the industrial structure of enterprises,and promote enterprises to constantly explore the transformation route.The CPC Central Committee and the State Council attach great importance to the enabling role of the digital economy.In order to lead the digitalization of traditional industries,more than 100 special strategic plans have been issued around the digitalization of industries,and vigorously support emerging industries such as big data.Under the dual guidance of trends and policies,digital transformation not only changes the logic of enterprise organization operation and the way of value creation,but also is the source of power driving the development of the real economy in the new era.Especially recently,under the impact of the COVID-19 on economic development,digital technology is an important way for enterprises to gain competitive advantage,which forces enterprises to carry out digital transformation.In the future,digital transformation is a common opportunity and challenge for enterprises,and also a topic of common concern for theorists and practitioners.Through the combination of big data,Internet of Things and other technologies,digital transformation upgrades and transforms the existing business model and organizational structure of enterprises,thus optimizing the business mode of enterprises,improving the core competitiveness of enterprises,and triggering disruptive changes in the logic of enterprise value creation.Digital technology not only changes the value creation elements of enterprises themselves,but also its impact is gradually reflected in the specific behavior decisions of enterprises.Auditor selection is one of the key financial decisions of listed companies.High-quality auditors can improve corporate governance and maintain the healthy development of the market.So,as the object of audit work,will the deepening of digital transformation affect the auditor’s selection decision? In view of this,this paper discusses whether the digital transformation of enterprises will affect the choice of auditors.This paper mainly starts from theoretical analysis and empirical test.In the part of theoretical analysis,first of all,through collating domestic and foreign literature,the paper summarizes the impact of digital transformation on enterprises,which can be divided into enterprise performance,enterprise innovation and enterprise operation.In addition,the impact of enterprise digitalization on audit work is currently mainly focused on audit quality and audit costs,while there are few literatures to discuss the impact of digitalization transformation on the behavior and decision of enterprises to choose auditors.Secondly,by sorting out the literature on the factors affecting auditor selection,it is found that the current research focuses on three aspects: the impact of corporate ownership structure,corporate director characteristics and corporate strategy on auditor selection.Therefore,from the perspective of the impact of digital transformation on auditor selection,this paper demonstrates based on principal-agent theory and information asymmetry theory,and puts forward assumptions.In the empirical analysis part,this paper empirically examines the relationship between corporate digital transformation and auditor selection based on the sample of A-share listed companies in Shanghai and Shenzhen from 2011 to2021.Among them,Python is used to analyze the text of the annual report of listed companies,and the frequency of key words related to digital transformation in the annual report of enterprises is mined as an alternative variable of the level of enterprise digitalization;In addition,the international "Big 4"(Big 4)is used as a measure of high-quality auditors.At the same time,the Logit model is established to test the hypothesis,and a series of robustness tests are carried out to ensure the robustness of the conclusion.The method of propensity score matching and Heckman two-stage regression are used to deal with endogenous problems.In addition,the influence mechanism test and grouping regression are also carried out.Finally,the empirical results show that there is a significant negative relationship between corporate digitalization and auditor selection,that is,the higher the degree of digitalization,the more enterprises tend to choose "non" Big 4 accounting firms for audit.The path mechanism test found that the digital transformation of enterprises affected the choice of auditors by reducing agency costs and reducing the degree of information asymmetry of enterprises.Further research also found that this relationship is more significant in state-owned enterprises.The high-tech attributes and auditor selection of enterprises do not show significant statistical significance.On the contrary,in non-high-tech enterprises,the impact of digital transformation on auditor selection is more obvious.In addition,compared with small-scale enterprises,the digital transformation of large-scale enterprises has a stronger negative relationship with auditor selection.The research conclusions of this paper provide suggestions for relevant departments to guide enterprises’ digital transformation and make digital transformation policies,and also provide reference for enterprises’ digital transformation decision-making.For regulators,we should improve the supervision of the transformation of non-state-owned enterprises,create a better market environment for non-state-owned enterprises,and realize the benign and stable growth of the market economy.Enterprises themselves should follow the trend of digital transformation and use digital technology to promote the transformation and upgrading of enterprise organizational structure,so as to improve the level of governance and promote the high-quality development of enterprises.Firms should also realize the integration and development of audit work and digital technology as soon as possible,consider using the audit methods of digital audit technology,and improve the ability to prevent and respond to audit risks.The innovation of this paper is as follows:First,it reveals the mechanism of agency cost and information asymmetry between the degree of digitalization and auditor selection.Based on theoretical analysis,this paper puts forward the mechanism path that the degree of enterprise digital transformation affects auditor selection,and further explores the specific impact mechanism of digital transformation on enterprise auditor selection by using statistical test method,which opens the path black box to a certain extent,and is a supplement to the existing research.Secondly,it reveals that there are boundaries between the influence of digital degree on auditor selection in different situations.By dividing the property rights,industries and scales of enterprises,stratified and comparative analysis of the data,this paper discusses the cross-sectional differences of the impact of the degree of digitalization on auditor selection,which is helpful to further supplement and improve the existing research fields and play a certain role in supplementing the existing research.