Abstract
The competitive position of an enterprise usually changes dynamically with the continuous growth and development of the enterprise. In this process, the business risks of the enterprise also change. According to the audit demand insurance theory, companies often use auditing to avoid and reduce risks, and auditors usually consider the corresponding risk premium in order to protect their own interests. This article uses the non-financial companies in China’s A-share market from 2011 to 2016 as a sample to study the impact of enterprises’ competitive position and growth on its audit fees. The research results show that: the competitive position of the company has a negative impact on audit fees; the growth of the company has a positive impact on audit fees; Further research shows that the impact of enterprises’ competitive position on audit fees is no longer significant in high-growth companies and still significant in low-growth companies, so corporate growth has a weakening effect on this relationship. This research enriches the content of the research on influencing factors of audit fees, and also has certain significance for the audit fees of accounting firms in practice.
Highlights
With the continuous development of modern economy and society, the scale of Chinese companies has continued to grow
The research results show that: the competitive position of the company has a negative impact on audit fees; the growth of the company has a positive impact on audit fees; Further research shows that the impact of enterprises’ competitive position on audit fees is no longer significant in high-growth companies and still significant in low-growth companies, so corporate growth has a weakening effect on this relationship
The results found that CEO control and corporate growth have significant positive impacts on audit pricing, but most Chinese listed companies are in the early stages of growth
Summary
With the continuous development of modern economy and society, the scale of Chinese companies has continued to grow. That the growth of the company will have a weakening effect on the competitive position; at the same time, in the context of the rapid economic growth of the entire country, it is often accompanied by fierce or even excessive competition among industry and enterprises, this fierce competition will weaken the company’s own competitive position and bring more uncertainty to the company’s future operations, which will affect the judgment of auditors in audit pricing; for some more innovative industry companies, because of their emerging technology products, business philosophy and more excellent opportunities for corporate growth, which will bring strong competitive pressure to the entire market, and will directly stimulate companies at the end to carry out technological innovation and concept innovation, which will increase market competition and weaken the impact of enterprises’ competitive position on audit fees. By considering the relationship between the competitive position of enterprises and audit fees under different growth groups, this article explains the impact of the competitive position of enterprises on audit fees in more depth, which has certain value and significance
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