Auditors’ Response to Controlling Shareholders’ Share Pledging: Evidence from Audit Opinions and Audit Fees
研究审计师是否根据控股股东股权质押目的（为企业融资还是个人财富）调整审计意见和费用，发现为企业融资的质押公司更可能获得清洁审计意见和较低费用，且财务报告质量更高。
SUMMARY Share pledging is an important source of financing for shareholders in China. We investigate whether auditors respond differently in terms of audit reporting and pricing when client firms’ controlling shareholders pledge their shares to support their firms’ financing (business-pledging firms) or to increase their personal wealth (individual-pledging firms). Based on data from listed nonstate-owned Chinese firms, we find that auditors are less likely to issue modified audit opinions and more likely to charge lower audit fees to business-pledging firms than to individual-pledging firms. Additional evidence indicates that business-pledging firms have better financial reporting quality than individual-pledging firms. Taken together, our results suggest that auditors’ assessments of clients’ business and audit risks are associated with the objectives of controlling shareholders’ share pledging, which has significant policy implications for capital market participants. Data Availability: Data are available from the public sources cited in the text and from the corresponding author upon request. JEL Classifications: M42; O16.