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The financialization of real enterprises presents a dilemma for China's economic development. This study examines the impact of the financial asset allocation term structure on audit fees using a sample of Chinese A-share listed companies from 2009 to 2019. It also investigates the mediating role of financial risk and the moderating role of independent director characteristics. The results indicate that higher long-term financial assets is associated with higher audit fees, while short-term financial assets show no significant relationship with audit fees. These findings remain robust after several tests. Financial risk mediates the relationship between long-term financial assets and audit fees. Furthermore, among the characteristics of independent directors, the proportion of female independent directors and those with a financial background negatively moderate the relationship between long-term financial assets and audit fees, while independent directors with an overseas background and academic credentials positively moderate this relationship. Additional analysis reveals that firm size and financing constraints exhibit heterogeneity in their effects. This study contributes to the literature by enhancing our understanding of the factors influencing firms' financial asset allocation and audit fees, and by expanding the literature on the financial risk and characteristics of independent directors. [ABSTRACT FROM AUTHOR]

In response to growing pressure on companies to manage and improve their reputation regarding environmental, social, and governance (ESG) issues, the audit is regarded as a vital resource for ensuring ESG risk management, improving transparency, mitigating opportunistic constraints, and guaranteeing accurate reporting. The objective of this paper was to investigate the role of audit quality in improving ESG performance, as well as to examine the role of media coverage represented by ESG controversy score in moderating these relationships. We analyzed 303 Chinese companies with 2,121 observations covering the period from 2017 to 2023. The results suggest that the effects of audit quality as measured by the Big 4 and audit fee on improving ESG performance are positive but not significant. On the other hand, the results reveal that media coverage serves as a positive, albeit non-significant, moderating variable between audit quality measured by the Big 4 and ESG performance, while it has a significant negative effect when audit quality is evaluated based on audit fees. The results indicate that improving ESG performance is significantly linked to auditors intensifying their practices and implementing their work more stringently. More importantly, media coverage is an important additional driver and economic incentive that encourages companies to steer clear of poor ESG-related practices. [ABSTRACT FROM AUTHOR]

The digital transformation of enterprises has brought great changes to the audit service demand of enterprises and the audit service supply of auditors. Therefore, there is a pressing need to study the digital transformation of enterprises and its impact on auditor switch. This paper aims to explore the influence of enterprise digital transformation on auditor switch and its potential implications for improving auditor efficiency. Using Python's machine learning tools and text analysis methods, This paper measure the digital transformation of Chinese listed companies and study the impact of digital transformation on the frequency of auditors witches. Our findings suggest that companies that have undergone digital transformation have reduced the frequency of changing auditors by alleviating information asymmetry, enhancing the effectiveness of companies' internal controls and increasing audit fees. This unique measurement mode of digital transformation provides new evidence for the relationship between the audit service demand of enterprises and the audit service supply of auditors under the digital transformation environment. The research can assist businesses in understanding how digital transformation affects auditing professionally and in improving their audit processes accordingly. [ABSTRACT FROM AUTHOR]

Prior literature finds senior executives can influence auditor decision making. However, few studies have discussed the impact of employee's personal characteristics. Our research aims to fill the above research gaps by examining the impact of employee level education on audit costs. Taking A-share listed companies in Shanghai and Shenzhen from 2006 to 2021 as the research object, this paper examines the impact of employee education on audit fees. It is found that highly educated employees can effectively reduce the audit fees borne by the company, but the implementation of the Labor Protection Law weakens this inhibitory effect. In the case of low marketization level and weak Confucian culture intensity, employee education level has a more significant inhibitory effect on audit fees of listed companies. This study provides a basis for empirical research on the impact of employee attributes on auditor decision making, provides a new research perspective on the impact of labor protection law at the corporate micro level, and enriches the theoretical research on corporate governance rooted in traditional Chinese culture. We contribute to the practice that implications for evaluating the effectiveness of adopting labor protection. [ABSTRACT FROM AUTHOR]

Driven by innovation strategy, Chinese enterprises' innovation investment, and research and development capability have been continuously improved, and the audit risk caused by this has attracted widespread attention from the academic community. This study takes China's A-share listed companies from 2013 to 2021 as samples to empirically test the relationship between innovation input and audit pricing of Chinese enterprises. Research shows that the higher the innovation investment, the higher the audit cost. High-quality corporate governance, sufficient research and development personnel, research and development subsidies, and operating cash flow can all play a negative moderating role. A good innovation environment will weaken the positive influence between innovation input and audit fees. This study theoretically confirms the risk-oriented audit pricing mechanism, which is of great significance for optimizing enterprise innovation risk management and improving audit service levels. [ABSTRACT FROM AUTHOR]

This paper investigates the international accounting network memberships' impact on audit fees. We find that, firstly, the audit fees charged by the member audit firms are significantly higher; secondly, if the revenue, ranking or audit and accounting business share of the international network the audit firm join is higher, the charge is also higher. Additional results show that economic policy uncertainty will intensify this positive relationship, and member audit firms charge higher fees by improving their overseas expertise. We also find that international network memberships will reduce abnormal audit fees, and improve the quality of financial reports. [ABSTRACT FROM AUTHOR]

Overconfidence, as a psychological feature that is difficult to measure, means that managers are overconfident in their management ability, investment judgment ability and knowledge richness, thus overestimating their ability and making irrational behavior. Based on the sample of Chinese listed firms from 2014 to 2018, we measure managerial overconfidence in terms of age, gender, education, position and salary, and analyzed the relationship between overconfidence, abnormal audit fees, and the balance mechanism of shareholders. The research results show that there is a significant positive correlation between managerial overconfidence and abnormal audit fees, and the balance mechanism of shareholders can significantly inhibit the positive correlation between managerial overconfidence and abnormal audit fees. The research results of this paper are conducive to the supervision department to further improve the relevant supervision measures, improve the audit quality, and provide theoretical support for the more specific requirements of audit fee information disclosure. [ABSTRACT FROM AUTHOR]