Abstract
At present, most companies in China have the problem of inefficient investment, and inefficient investment will bring certain business risks to the enterprise. In addition, the quality of external auditing, as a part of the company's external governance mechanism, also has an impact on the investment efficiency of listed companies and corporate risks. Based on big data research, this paper selects data samples of Chinese A-share listed companies from 2014 to 2018, and uses STATA to process the data to study the impact of overinvestment on corporate risks. At the same time, considering the influence of external independent audit, this paper try to verify whether audit quality will have a negative moderating effect. In addition, this article combines China's system to study whether overinvestment and audit quality have different impacts on corporate risks for companies with different property rights. Through the use of big data analysis and computer data processing analysis, this paper finds that audit quality has a restraining and regulating effect on corporate risks caused by corporate over-investment, and this effect has certain differences in companies with different property rights.
Highlights
Investment activities are one of the important activities in the financial management of modern enterprises
This article draws on Li Wengui and Yu Minggui’s (2012) method of measuring corporate risk, and divides profit before interest and taxes by total assets to measure the return on assets (ROA) of a company, and adjusts the annual ROA according to the industry average to obtain ROA_adj
This article uses big data empirical methods to analyze the impact of over-investment and audit quality on corporate risks, and draws the following conclusions: Overinvestment in listed companies exacerbates business risks, that is, the deeper the degree of overinvestment of the company, the higher the degree of risk faced by the company, indicating that over-trading is an extremely important factor that causes corporate risks
Summary
Investment activities are one of the important activities in the financial management of modern enterprises. Investment activities are related to the financial risks and operating risks of the enterprise, and critical to the value and development of the enterprise. China's macro-control and internal adjustments of enterprises have given enterprises more freedom of investment autonomy, what follows is that many enterprises have inefficient investment problems, and this may bring a series of operating risks. This article uses big data to study how over-investment and audit quality of listed companies affect corporate business risks, to a certain extent, which can deepen the depth of related theoretical research on corporate inefficient investment and corporate risk. Aiming at China's capital market environment, this paper puts the degree of overinvestment of listed companies, audit quality and corporate risk in the same framework to conduct big data empirical research, and provides a new perspective for the study of the relationship among the three
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